Loan fee scam targets people hit by soaring cost of living

SCAMMERS are cashing in on people struggling with the cost of living by targeting them with fake “advance fees” for loans, Lloyds Bank has warned.

Lloyds issued the alert yesterday after a surge of incidents in which fraudsters pose as a legitimate firm and demand money upfront for a loan.

Such “advance fee” frauds have increased by 90 per cent this year with victims losing £231 on average, the bank said.

The fraudsters contact victims who have entered their details into a seemingly professional website after searching for a loan online.

Lloyds said the scammers were posing as representatives of legitimate loan companies – even sending documents to back up their claims.

Liz Ziegler, of Lloyds, said the conmen were preying on customers with poor credit scores or those who were in financial difficulty as living costs rise.

She 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 became scarce and more people shopped online.

“The important thing to remember is a genuine loan company will never ask for an upfront payment before releasing the funds.”

Timothy Campbell, of cybersecurity firm Mimecast, also urged caution. He said: “There is no doubt that scammers are taking advantage of the cost of living crisis, as those in desperate times are less likely to conduct proper checks.

“Customers should be extra vigilant when receiving any communication from financial institutions – especially unsolicited correspondence.”