FCA urges consumers to watch out for loan fee fraud

It comes as research from the regulator shows that more than half – 55% – of UK adults are more worried about their finances this summer, with rising food and energy costs cited as the biggest concerns – impacting 63% and 53% of people respectively. This is compounded by summer specific spending, with entertainment costs and summer holidays impacting 24% and 22% of people. 

Additionally, while 46% of UK adults have either gone or plan to go away on a summer holiday, 35% are worried about how they’re going to pay for it – with many now either using credit or their savings to fund their summer spending. In total, 18% said they’ll use savings for this spending, while 12% are turning to credit cards. 

And parents are particularly feeling the financial burden, with 70% of respondents with children under the age of 18 saying they’re worried about their personal finances. Alongside this, when asked about how they plan to fund their spending, 21% responded they either had already, or were planning to, take out a loan to cover the costs.  

With those looking to take out a loan going up, the FCA is raising awareness of loan fee fraud to do the three-step check to protect themselves from scams.  

The FCA’s executive director of enforcement and market oversight explained: “For many, summer brings with it the chance to relax and unwind but it also brings with it financial pressures - from holidays and festivals to funding days out, or out of term childcare for parents.  

“With inflation, energy costs, and rising mortgage bills, this summer spending will come at a time of enhanced vulnerability for many. For fraudsters, this provides the perfect opportunity to take advantage of people considering how to make ends meet over the summer months.

“Follow our three-step check for loan fraud for how to spot the signs of loan fee fraud, and if you need to apply for a loan, check the Register to see if the firm is legitimate.  Don’t get burned by scams on your summer holidays.”