Quick tips to help spot Loan Fee Fraud

By Juan Pombo
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Heads up, if you’re asked to pay an upfront fee for a loan or credit, it could be a scam.

Lately, there's been an increase in reports of loan fee fraud - where scammers persuade people to pay an upfront fee for a loan which they never receive. So, in association with the FCA, we've put together some handy tips on how to spot the warning signs of loan fee fraud.

What to look out for

- You may have made several loan applications online and then been contacted by text, email, or a call out of the blue and offered a loan.

- You may be asked to make an upfront payment into a bank account, or transfer money via an unusual method e.g. Western Union or iTunes vouchers.

- The scammers may claim that the fee is refundable and will be used as a deposit, administrative fee, insurance or because of bad credit history.

- You may be put under pressure to pay the fee quickly.

- Once the initial payment has been made, the scammer might 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.

How to protect yourself:

- When applying for a loan you should only deal with firms authorised by the Financial Conduct Authority (FCA), the regulator of all financial firms operating in the UK.

- You should check the  Financial Services Register to see if a firm is regulated by the FCA , and check that the contact details provided by the firm match the details on the Register.

- Always use the contact details on the Register rather than a direct line or email they give you.

- For more information visit www.fca.org.uk/consumers/loan-fee-fraud

 

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Representative example for a loan of £4,000 for 24 months at an interest rate of 15.5% APR fixed. In this example the total amount payable (including interest and fees) would be £4633.57 and your monthly repayments would be £193.07.

giffgaff receives a fee for introducing personal loans to Retail Money Markets Ltd trading as Ratesetter.

giffgaff gameplan is a trading style of giffgaff Limited, we are a credit broker and not a lender and introduce loan applications to its selected provider of loans Retail Money Market Limited trading as Ratesetter. Terms and conditions apply. Finance subject to status. 18s and over. Credit is provided by Retail Money Market Limited trading as Ratesetter, 6th Floor, 55 Bishopsgate, London EC2N 3AS Ratesetter is authorised and regulated by the Financial Conduct Authority – Firm Reference Number 633741

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Posts on this site reflect the opinion of the members posting only, and not necessarily giffgaff’s opinions or views. There’s a lot of information here that can help you, however, you must remember that we operate an open forum and sometimes messages that are posted are misleading, deceptive, or inaccurate. If you follow these tips, you do so at your own risk. Always do your research and check the terms.