3 steps to help stop Loan Fee Fraud

Published: 2 January 2024

With the pressures on the cost of living continuing, up to 1 in 5 of the UK population are taking out loans to cope.  This is coupled with scams on the rise is creating a dangerous combination whereby those most vulnerable in society are increasingly at risk of falling victim to loan fee fraud.

Loan fee fraud is when someone who is looking for a loan is asked to pay an upfront fee before receiving it. They pay the fee, but they never get the loan.

To support people the Financial Conduct Authority (FCA) are running a campaign to increase awareness of loan scams and the 3-step check that can help protect people.

The 3-step check

Looking for a loan? Protect yourself from loan fee fraud.

Pause and do the 3 step check.

  1. Cold called?
  2. Asked to pay an upfront fee?
  3. Pressured to pay quickly or unusually?

Tick any of these? STOP it could be a scam.

If you need to apply for a loan, you should only deal with authorised firms. If you don’t, you won’t be protected if things go wrong, and you could end up losing lots of money.

  • Check the Financial Services Register to find out if the firm is authorised.
  • Check that the firm’s contact details match the details on the Register.
  • Always use the contact details on the Register, rather than a direct line or email you’ve been given.
  • If there are no contact details on the Register, or the firm claims they are out of date, call the FCA on 0800 111 6768.

Loan Fee Fraud Toolkit

A free toolkit is available to help raise awareness of the issue, which now includes Welsh translations. To help raise awareness please use the resources included in the Loan free fraud Partner Toolkit (pdf, 3.5mb)

If you have any questions or queries, please contact Geli Leach on Angelica.Leach@23red.com.

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