Lloyds Bank Warns of 80% Surge in Advance Fee Scams

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A leading UK bank has warned consumers about the rise of scams in which victims are asked to pay an upfront fee for a product or service that doesn’t materialize.

So-called “advance fee” fraud surged by 82% year-on-year in 2022, with fake ads for loans, jobs and rental properties among the most common tactics used by scammers, according to Lloyds Bank.

The lender claimed that the cost-of-living crisis may be forcing consumers into making risky decisions.

That’s especially true of loan fee scams, where fraudsters target people on low incomes or with a poor credit history in the hope they’ll take the bait. They’ll approve a loan no matter what the victim’s credit history is and then request an upfront fee in order to receive the funds, which never arrive.

Reports of loan fee scams have increased 105% year-on-year and continue to rise sharply, Lloyds warned.

“Fraudsters will ruthlessly adapt to any changes in consumer behavior and, with the increased cost of living putting more pressure on people’s finances, the recent surge in advance fee scams targeting those on low incomes or with a poor credit history is alarming,” argued Lloyds Bank’s fraud prevention director, Liz Ziegler.

“The important thing to remember is that a genuine lender will always conduct thorough credit checks prior to agreeing a loan and won’t ask for an upfront payment before releasing the funds. If you’re concerned in any way about your finances there are lots of reputable organizations that can help, and it always makes sense to speak to your bank first.”

The bank added that, on average, victims lost £711 ($881) last year, down significantly from £1194 ($1479) in 2021.

This could be because fraudsters are going for higher volumes of lower value scams.

Those aged 25–34 are most likely to fall victim, followed by 35–44 year olds. These two groups apparently make up around half (49%) of all victims.

Editorial credit icon image: Ink Drop / Shutterstock.com

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