FCA urges consumers to watch out for signs of Loan Fee Fraud as summer spending fuels financial pressure . With summer in full swing, the FCA launches its latest campaign to help consumers spot and avoid loan fee fraud.


  • FCA research shows over half of UK adults (55%) are more worried about their finances this summer than they were last year
  • With a quarter of all consumers surveyed (24%) turning to credit or loans to fund additional summer related spending, consumers may be more susceptible to being targeted by loan fee fraudsters
  • Parents in particular are feeling the pinch, with 21% either taking out or considering a loan this summer
  • Faced with rising risk, the FCA sets out a 3-step loan fraud checklist to help consumers protect themselves


As households continue to grapple with the cost-of-living crisis, there is a rising risk of fraudsters targeting already vulnerable consumers looking to cover the cost of spending over the summer period.

Loan fee fraud – where a consumer pays a fee for a loan they never receive – typically results in a £260 loss. This type of fraud has been growing year on year: the FCA’s data shows that last summer, there was a 26% increase in complaints from consumers who had fallen victim to loan fee fraud compared to 2021. This year, the rising cost-of-living coupled with summer spending pressures could increase the risk of loan fee fraud.


Summer spending increases financial stress


This summer, consumers are under increasing financial strain. New research from the FCA has found that over half of UK adults (55%) are more worried about personal finances this summer than they were last year. Cost-of-living pressures loom large. Rising food (63%) and energy costs (53%) were cited as the biggest concerns. However, summer related spending is compounding this, with entertainment costs (24%), and summer holidays (22%) being the next most prominent financial worries. And while 46% of UK adults have gone or plan to go away this year on a summer holiday, more than a third (35%) are worried about how they are going to pay for it.

This is driving many to fund summer spending either through savings or credit. According to the research, 18% of consumers will use savings to fund summer spending, and 12% are turning to credit cards. With 24% of consumers are turning to credit or loans to fund additional summer related spending, loan fee fraudsters could use this as an opportunity to steal money from consumers.


Parents in particular feeling the pinch


The summer months can prove even more of a financial burden for parents. 70% of respondents with children under 18 said they are worried about their personal finances this summer. And, among those going away, parents of children under 18 were noticeably more worried about funding holidays (56% compared to 35% across all households).

When asked how they plan to fund their spending, 21% responded that they either had already, or were planning to, take out a loan to cover cost. Other areas of concern for parents included the costs associated of having children at home for the summer (32%), funding summer related activities for children (24%) and back to school costs (24%).

Don’t let scammers enjoy your summer

The FCA is raising awareness of loan fee fraud over the summer by urging consumers looking for a loan to do the 3-step check to protect themselves from scams:


  • If you are cold called or emailed, it could be a scam
  • If you’re asked to pay an upfront fee, it could be a scam
  • If you’re asked to pay quickly or unusually, it could be a scam


If consumers need to apply for a loan, the FCA urges them to check the information on the FCA’s website. This includes checking the FCA Register to find out if the firm they are applying to for a loan is authorised. If the firm is not authorised, it is likely to be a scam.


Steve Smart, Executive Director of Enforcement and Market Oversight, said: 

“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 3-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.”

If a consumer deals with an unauthorised firm, they will not be covered by the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.


How to avoid loan fraud >

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