Hard-up families are being tricked into losing money in a fast loans scam that has grown thanks to the cost of living crisis. And cases of people taken in by the con have risen so sharply that Lloyds Bank has issued a warning to customers to stay on their guard against the fraudsters.
And the Financial Conduct Authority has also warned people to beware of text, email or phone loan offers out of the blue, offering access to fast cash. The scam works like this:
- Conmen set up an online adverts for fake companies or impersonate genuine firms offering fast loans;
- Struggling households are tempted by these ads as they offer of a short-term solution to cashflow problems;
- The fake loan is ‘approved’ by the scammers;
- The victim is then asked to send cash by bank transfer to reserve the loan;
- The victim never receives the loan, and once the money is received, the conmen disappear.
Read more: HMRC issues scam warning to 2.1 million Tax Credits customers
The fraudsters may ask for more money until the victim becomes suspicious – and people falling for the trick have risen by 90 per cent so far this year compared to first five months of 2021., with Lloyds saying the average victim loses £231.
The reason given for the advance payment can vary. Some of the common reasons scammers give include verification fee, processing fee or a guarantor fee and as always when it comes to scams, criminals know how to be appear genuine.
Liz Ziegler, retail fraud and financial crime director at…
