Families looking to borrow money to cope with the burgeoning cost of living crisis have become the target of criminal gangs.
Banks have warned of an alarming spike in “loan fee fraud” – just as Britons struggle with surging gas, fuel and food bills.
Victims have lost £300 on average but this has risen to £3,500 in the most extreme cases, according to TSB bank. It warned the “cruel” scam was on the rise as families looked for ways to get by.
The bank’s Paul Davis said the rising cost of living meant those struggling with energy bills, tax rises and inflation were especially susceptible. “Some of the most financially vulnerable people have been hit by heartless fraudsters, plunging those who can afford it the least into further financial hardship,” he said.
The scam targets consumers searching for loans online.
Borrowers list their details on comparison sites to find the best rates, and then typically receive a cold call telling them they are eligible for a cheap deal. Criminal gangs posing as lenders ask victims to pay some upfront set-up fees, which are not out of the ordinary for a personal loan.
But no loan is ever granted. Once the fees have been handed over, scammers cut off contact. This scam is on the rise as borrowing increases amid what economists have called the worst cost of living crunch for a generation.
The City watchdog, the Financial Conduct Authority, said cases were a third higher in the run-up to Christmas compared with last…
