Loan Fee Fraud Surges by a Fifth as Christmas Approaches


The UK’s financial regulator has warned of an increase in scams promising non-existent loans, as fraudsters look to pressure consumers struggling to make ends meet in the run up to Christmas.

The Financial Conduct Authority (FCA) polled 2000 UK consumers last month. It said cases of loan fee fraud rose 21% year-on-year for the 12-month period November 2021–October 2022. This doesn’t include those who reported to the FCA but managed to avoid being scammed out of money.

Victims typically receive an unsolicited call, text or email offering them a loan, and are pressured into making an upfront payment as a ‘deposit’ or ‘admin fee’ in order to proceed. However, there is no loan, and the scammers pocket the cash.

The tactic is more likely to work at a time when many are struggling to pay for festive gifts in the face of high inflation and a cost-of-living crisis.

Two-fifths of consumers feel pressured by family and friends to maintain their usual Christmas spending this year, while a third are concerned about how they will afford it. More than one in eight said they plan to take out a loan this year, according to the FCA.

However, nearly two-thirds (64%) of consumers don’t know what loan fee fraud is, and only a fifth (22%) can identify its warning signs, the regulator claimed.

The average amount lost is £260 ($322), more than half the amount UK consumers expect to spend on presents this Christmas, it said.

That’s why the FCA is launching a public awareness campaign, to help consumers avoid loan fee fraud this festive season.

“At a time of heightened stress and pressure, scammers and illegal lenders will rush consumers into bad decision-making. Be aware of red flags – such as being asked for a fee or being asked to pay in an unusual way,” said Mark Steward, FCA executive director of enforcement and market oversight.

“If you are considering taking out a loan, please pause and check the FCA’s Register to make sure you are dealing with a legitimate lender. Don’t let scammers be the ones enjoying your Christmas this year.”



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