The cost-of-living crisis is exerting increasing pressure on people’s finances, with one in five adults taking out loans to cope. 

At the same time, scams are rising, including loan fee fraud, where people are asked to pay an upfront fee but never receive the loan.

Now, it’s even more important to take a moment to stay safe when looking for a loan. 

What is loan fee fraud?

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

The pressures of the cost of living crisis often mount over Christmas, with 40% of UK adults concerned about how they will manage financially. 

Reports find that these financial pressures often cause people to resort to loans, including risky loans that put them in danger of scams.

As a result, the Financial Conduct Authority (FCA) is relaunching its campaign to protect people from loan fee fraud. 

Will scammers target me? 

Scammers are cruel. 

They target society’s most financially vulnerable people – those who tend to be on lower incomes, might have lower credit ratings or have limited access to mainstream credit. 

As more people become vulnerable to the cost-of-living crisis, more people are now at risk.

Data from the FCA shows the scammers have targeted:

  • Those aged 25-45
  • More males (60%) than females (40%)
  • Those in manual occupations or unemployed

However, it’s essential to remain vigilant and protect yourself even if you’re outside the target demographic.

How can I protect myself?

The FCA has suggested using its 3-step loan fraud checklist to protect yourself.

If you’ve been:

  • cold-called or emailed, it could be a scam
  • asked to pay an upfront fee, it could be a scam
  • asked to pay quickly or unusually, it could be a scam

Protect yourself from loan fee fraud by stopping your application if you tick any of the above boxes.

Contact us

If you’re worried about your finances and need free debt advice, we can help. Contact us on 0800 316 1833 to get started or visit