Cash point

More than £3.5million has been lost to crooks asking for upfront fees from people seeking loans.

City watchdog the Financial Conduct Authority is warning of the growing threat from fraudsters offering bogus loans. The scammers tell victims they must pay a fee to access a loan, which never appears.

Once thieves have extracted a first payment they then try and persuade people to hand over more. The average loss last year was £740.

Mark Steward, an FCA executive director, said: “We’re seeing an increasing number of cases of loan fee fraud reported to us. Scammers take advantage of the excitement people feel when they are offered or accepted for loans and make the loan conditional for an upfront fee. Of course, no loan ever materialises.”

Rogues prey on the most vulnerable, those unable to access credit on the high street and who can least afford to lose money.

When applying for a loan, be wary if you’re asked for a deposit, admin fee or to take out insurance. That also applies if you’re asked to pay fees via, say, iTunes vouchers or a money transfer service, or if there’s pressure to pay quickly or multiple fees.