Advance fee loan scams have increased by more than 90 per cent this year with victims losing an average of £231 each, new research has shows.
Lender Lloyds Bank issued an urgent warning to consumers amid fears that consumers are unaware of this type of bank fraud.
Advanced fee loan scams involved a victim being asked to pay an upfront fee for a loan.
Although legitimate lenders do charge fees, these will typically be added to the loan and are rarely charged up front.
The scam normally occurs online, and involves an advert for a fast loan from a company the borrower has never hear of before. However, sometimes fraudsters will try to impersonate a genuine firm.
The victim will have their application approved regardless of their credit history – but before they receive the loan, they are told they must pay an upfront fee via bank transfer.
Once this fee is paid, the fraudster may even ask for further payments. Eventually, the victim does not hear from the company again and the loan is never received.
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Reports of advanced fee loan scams have increased by more than 90 per cent already this year, with the average amount lost by victims now standing at £231, Lloyds said, with the number of cases continuing to rise sharply. .
Liz Ziegler, retail fraud and financial crime director at Lloyds Bank, said: “Organised crime gangs will ruthlessly exploit any change in consumer behaviour.
“We saw that during the pandemic with the surge in purchase scams as certain goods…
