- Losing money which you have paid as a ‘fee’ for a loan or credit you do not receive.
Protect yourself from loan fee fraud
- When applying for a loan, deal only with authorised, reputable lenders.
A type of advance fee fraud, loan fee fraud takes place when you are offered a loan either as a result of submitting an application or out of the blue, and asked to pay an upfront arrangement fee to secure it, only to find that you have been defrauded out of your money.
Whether you are told that the fee is refundable and used as an admin charge, deposit or insurance payment – or alternatively because you have a poor credit history – you will generally be asked to pay the fee into by direct bank transfer or another unusual method. You may also be pressured into paying the fee quickly in order to secure the loan.
People who are being forced into making difficult financial choices, for example when the cost of living is increasing at a faster rate than usual, can be particularly vulnerable to falling victim.