Officers have seen a rise in advance-fee loan fraud, where adverts promising loans regardless of credit history lure consumers into paying fees in advance of supposedly receiving loans that are ‘guaranteed.’
A person typically replies to an advert for a fast loan and will have their application approved regardless of their credit history.
Before they receive the loan, they are told they must pay an upfront fee to cover insurance for the loan.
Often there is more than one request for money, for example the victim might be asked to pay an initial transfer charge, and then once this has been paid, the victim will be contacted again and told to pay an additional fee due to ‘problems’ issuing the money.
People hoping to get back mis-sold Payment Protection Insurance are also targeted in a similar way.
Detective Inspector Dave Warnes of the Northamptonshire Police Economic and Financial Crime team said: “Advance fee loans are generally empty promises of a personal or business loan requiring payment of a fee in advance.
“Fraudulent advance fee loan schemes generally prey on vulnerable consumers — the unemployed, those who have bad credit ratings, or those in immediate need of money for emergencies.
“The fee may be called “processing”, “application” or “first month’s payment”.
“While legitimate lenders may require you to pay application, appraisal, or credit report fees, these fees are never required before the lender is identified and the application is completed.
“In addition, the fees are generally made payable to the lender, not the broker or arranger of the supposed “guaranteed” loan or extension of credit.
“We urge people not to fall victim to this scam. In most instances, you will never receive the promised loan and either never hear from the loan company again or you may later be that you are ineligible for the credit.”
Action Fraud is the UK’s national fraud reporting centre acts as a central point of contact for all information about fraud and financially-motivated internet crime, including how to report fraud.
For more details visit www.actionfraud.police.uk or call 0300 1232040.