Staying safe and avoiding loan fraud

We’ve all seen the headlines about fraud and how someone perfectly sensible has succumbed to the scammers. This just shows – it could happen to any one of us, even if you think you’re too savvy to get caught out. When you’re in need of cash and at the end of your tether, even the soundest of judgements can slip – so here’s how to avoid being yet another victim to fraudsters.

How big is loan fraud?

The overall yearly cost of fraud in Britain could be as much as £193 billion. To put it another way, that’s £6,000 per second or £3,900 for every adult in the country – it’s staggering. So it’s all very well saying it’ll never happen to you, but chances are, that at some point, it could.

With loan fraud, you may be asked to pay an upfront fee or make the first month’s repayment in advance in order to activate the loan. It might not even be a large sum of money, it can start from just £35, but in cases of fraud you won’t see that or your loan. You might also be asked for your bank details – and we all know where that can lead to.

Staying safe and avoiding loan fraud

Compare loans

Compare loans and start saving now

get a quote

Steps to stay safe

There’s one golden rule – if something sounds too good to be true, it usually is. We wish it weren’t the case because we all want something for nothing and sometimes you want to believe the hype, but be like Spock and let logic rule; here are some top tips:

1)    No such thing as a free meal – loans will always come with terms and conditions, a loan that promises you money without asking you any questions probably isn’t bona fide.

2)    Beware upfront fees – genuine brokers (people that organise loans on your behalf) can charge you an upfront arrangement fee but if you don’t take up the loan or cancel the arrangement within six months then you should get a refund.

3)    Be cautious of initial instalments – if you’re asked to pay the first month’s instalment, don’t expect the loan to come anytime soon – lots of scams involve asking you to part with cash and then leave you high and dry.

4)    Check, check and check again – check credentials, call the lender to verify phone numbers and read customer reviews. Lenders and brokerage firms also need to be registered with the Financial Conduct Authority (FCA) and they should show their registration number on their website or paperwork, check this number against the FCA’s financial register

5)    Scammers are smart, so be smarter – fraudsters are clever and hustling’s how they make money. Some will even use the name or address of genuine companies. If there’s any doubt in your mind, check addresses and if you’re on the phone, hang up and call the main telephone number of the company in question.

6)    Be wary of disclosing details – if you’re not expecting to part with your details, then don’t. 

Help! I’ve been scammed

Firstly, stay calm, now is not the time to play the headless chicken. Report the incident to Action Fraud who are the national fraud reporting centre, they’ll be able to help and advise on what to do next. When it comes to getting back any money you’ve lost, then chances are sadly, very slim.

If you’ve been asked to pay brokerage fees but there’s still no sign of a loan on the horizon within six months, then you can ask for your money back. Contact the broker directly and if they aren’t helpful then you should contact the FCA helpline.

what to do if you are a victim of loan fraud

Where can I find a trusted loan?

We’re not about giving you nightmares, but it’s important to be wary of scams because if you’re already worrying about money, the last thing you want is to be at the receiving end of fraud.

Which is why we’ve put together our simples guides to finances; so that you can see what your options are. Whether you’re looking to borrow just a small amount of money or you’re contemplating a personal loan to turn your house into the home of your dreams – then we can help. And if you’re worried about making ends meet when you’re in between jobs, then have no fear, find out about getting a loan whilst you’re unemployed, but if you just want to get stuck in then let’s start comparing loans right now.

Compare loans

Compare loans and start saving now

get a quote