Lloyds Bank has issued an urgent warning to consumers as the number of ‘advance fee’ loan scams has surged recent months. Loan scams happen when a victim is asked to pay an upfront fee for a loan. They will typically reply to an online advert for a ‘fast loan’ from a company they have never heard of before, though sometimes the fraudster will try to impersonate a genuine firm.
They will have their application approved regardless of their credit history. Before they receive the loan, they are told they must pay an upfront fee by 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.
Reports of this type of scam have increased by more than 90% already this year, with the number of cases continuing to rise sharply. The average amount lost by victims is £231.
How it works:
- You are usually contacted after searching online for a loan and entering your contact details onto a website that looks professional.
- The scammer may pretend to be a representative from a genuine company and might send you documentation to make it appear legitimate.
- You’ll be approved for a loan, but before the money is released, the fraudster will invent a reason why you need to pay an upfront fee.
- They might continue to ask for more payments to try and get as much money as possible before you become suspicious.
Some common reasons given by the scammers for…
