With many Brits experiencing heightened financial stress this summer, the Financial Conduct Authority (FCA) is alerting the public to be vigilant against loan fee fraud.
A recent survey revealed that 55% of UK adults are more anxious about their personal finances now than they were last year, largely due to soaring food and energy costs, compounded by seasonal expenditures such as holidays. In response, many individuals are turning to savings or credit to fund their summer activities. The research indicates that 18% of Brits plan to dip into their savings, while a quarter will rely on credit or loans.
The FCA specifically warns about loan fee fraud, in which victims pay a fee for a loan that they never actually receive. This type of scam typically results in an average loss of around £260 and tends to peak during the summer months, showing an alarming year-on-year increase. The FCA reported a 26% rise in complaints from consumers affected by loan fee fraud in the summer of last year compared to 2021.
To protect themselves, individuals should be wary of unsolicited cold calls or emails, requests for upfront fees, and any pressure to make quick or unusual payments.
Steve Smart, executive director of enforcement and market oversight at the FCA, commented, “For many, summer offers a chance to relax and enjoy, but it also brings significant financial pressures—from holidays and festivals to expenses related to childcare. With inflation, rising energy costs, and increased mortgage bills, this season of spending can leave many in a more vulnerable position.” He added, “This environment creates the perfect opportunity for fraudsters to exploit those trying to make ends meet during the summer months.”