Spot the warning signs of loan fee fraud

Financial Conduct Authority


Have you been asked to pay an upfront fee when applying for a loan or credit? Find out why this may be a scam and how to protect yourself.

Coronavirus (Covid-19): A major event like coronavirus can start new types of scam activity. Find out about potential scams, how they could affect you, andĀ how to protect yourself.


We are receiving a growing number of reports from consumers who have been asked to pay a fee ā€“ usually between Ā£25 and Ā£450 ā€“ for a loan or credit that they then never receive.

This is a scam known as ‘loan fee fraud’Ā or ‘advance fee fraud.

Spot the warning signs of loan fee fraud

  • You may have made several loan applications online and then been contacted out of the blue by text, email or phone and offered a loan.
  • You may be asked to make an upfront payment into a bank account, or transfer money via an unusual method, for example Western Union or iTunes vouchers.
  • The scammers may claim that the fee is refundable and will be used as a deposit, administrative fee, insurance or because of bad credit history.
  • You may be put under pressure to pay the fee quickly.
  • Once the first payment has been made, the scammer might contact you again to ask for more payments before they can give you the loan.
  • Even though you make the payments, you never receive the loan.

How to protect yourself

When applying for a loan, you should only deal with FCA authorised firms. If you deal with an unauthorised firm, you wonā€™t be covered by the Financial Ombudsman Service if things go wrong.

  • Check ourĀ Financial Services RegisterĀ to see if the firm is regulated by us.
  • Check that the firm’s contact details match the details the FS Register.
  • Always use the contact details on the FSĀ Register, rather than a direct line or email given toĀ you.
  • If there are no contact details on the FSĀ Register, or the firm claims they are out of date, call our Consumer Helpline on 0800 111 6768.
  • Read more information onĀ unauthorised firms and individualsĀ andĀ how to protect yourself from scams.

How loan fees work with authorised firms

If you are asked to pay an upfront fee before getting a loan from an authorised firm, the firm should send you a notice setting out certain information. This should include:

  • the legal name of the firm as it appears on theĀ FS Register
  • a statementĀ that the firm is acting as a credit broker
  • a statement saying if you need to pay a charge for the firmā€™s services
  • the amount of the charge (or how it will be calculated),Ā when theĀ firm will take payment from you and how you will pay

You will have to reply to the notice sayingĀ that you received itĀ and confirming that you understand what it says.

If you are asked to pay an upfront fee from a firm who doesnā€™t follow thisĀ process, it could be a scam.Ā 

If you need advice on borrowing or debt, you can visit theĀ Money Advice Service.

Report a scam

If you think you have been contacted by an unauthorised firm or aĀ scam, then you should report it to us by using ourĀ reporting form.

You can also contact ourĀ Consumer HelplineĀ on 0800 111 6768.


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