Yahoo Finance Surge in ‘advance fee’ scams costing victims £711 on average
Cases of "advance fee" scams where a victim is asked to pay an upfront fee for products or services jumped by more than 80% last year, with victims losing £711 on average, according to Lloyds (LLOY.L).
As living costs rise, fraudsters are increasingly turning to this type of scam to target those struggling financially.
Advance fee scams happen when a victim is asked to pay an upfront fee for goods or services that don’t materialise.
Fake ads for loans, jobs and rental properties are among the most common tactics currently being used by criminals.
Reports of loan fee scams have more than doubled over the last 12 months, up by 105% compared to the previous year, with the number of cases continuing to rise sharply. The average amount lost by victims last year was £214.
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Victims will typically reply to an online advert for a "fast loan" from a company they have never heard of, though sometimes the fraudster will try to impersonate a genuine firm.
They will have their application approved regardless of their credit history. Before they receive the loan, they are told they must pay an upfront fee by bank transfer.
Once this fee is paid, the fraudster may even ask for further payments. Eventually, the victim does not hear from the company again and the loan is never received.
Liz Ziegler, fraud prevention director at Lloyds Bank, said: “Fraudsters will ruthlessly adapt to any changes in consumer behaviour 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.
“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 organisations that can help, and it always makes sense to speak to your bank first.”
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London saw the highest number of cases of advance fee scams in the UK last year. But the West Midlands was a particular hotspot as, relative to population size, as the number of cases reported was around 20% higher than the national average.
Those living in more deprived areas of the country were twice as likely to fall victim as those in less deprived areas, as more deprived areas accounted for over 70% of all advance fee scam cases.
“The abundance of these fake online ads reinforces the importance of the government’s Online Safety Bill to ensure social media sites and search engines stamp out fraudsters operating on their platforms,” Ziegler added.
