Loan fee fraud

Asked to pay a fee when applying for a loan or credit? Find out why this could be a scam.

We have received reports of people handing over a fee – usually between £60 and £100 – when applying for a loan or credit that they ultimately never receive.

This is a scam that may also be called ‘advance fee fraud’.

How loan fee fraud works

You may be contacted by unsolicited text messages, or called out of the blue or after leaving your phone number on a website.

You will then usually be asked to make payments into a bank account or with a money transfer firm before a loan can be approved or released.

Once the initial payment has been made, and the loan withheld, the scammers will often try to contact you again to ask for further payments before the loan can be released.  But regardless of the number of payments made, the loan never materialises.

Protect yourself

Most businesses that offer goods or services on credit, lend money to consumers or provide debt solutions and advice to consumers will be offering ‘consumer credit’ products and services.

Almost all firms and individuals carrying out consumer credit activities in the UK need to have what we call ‘interim permission’ or be authorised by us. However, some firms act without our permission or authorisation and some knowingly run scams.

You should search our Consumer Credit Register and Financial Services Register to find out whether a firm is, or has been, regulated by us.

If you deal with a consumer credit firm that does not have interim permission or our authorisation you will not be covered by the Financial Ombudsman Service if things go wrong.

You should also be aware that some scammers are copying or using the name or other details of genuine consumer credit firms. This is what we call a ‘clone firm’.

To confirm the identity of a firm you should always call them back on the switchboard number given on our registers rather than a direct line they might give you. 

If there are no contact details on the registers or the firm claims they are out of date, contact our Consumer Helpline on 0800 111 6768.

There are more steps you should take to protect yourself from unauthorised firms.

Report a scam

If you think you have been approached by an unauthorised firm or contacted about a scam, you should report it to us by filling in the unauthorised firm reporting form or calling our Consumer Helpline on 0800 111 6768.