Shropshire residents warned over loan fee fraud
Just Credit Union, the region’s not-for-profit savings and loans co-operative, is warning people to be alert to loan fee fraud which is a type of scam targeting those looking for loans online.
The credit union, which principally serves Shropshire and Telford & Wrekin, said scammers then contact the victims to offer them a loan, but ask for an upfront fee.
People are then pressured to pay the upfront fee quickly. Alternatively, they could be asked for payment in an unusual way such as with vouchers or a money transfer. Ultimately, say Just Credit Union, the victim never receives the loan.
The research by the Financial Conduct Authority shows that people are pushed into borrowing more money than they did this time last year with searches for instant loans up 250%.
“This spike in loans means that more people fall victim to loan fee fraud with the fraud increasing by 26% during this summer’s months,” said Steve Barras, Just Credit Union’s Development Officer.
“The scammers will often target people through cold calls, cold emails and social media. Often, after an individual uses a loan website or interacts with a new page/user on social media, they will be contacted and tricked into paying the upfront fee.
“All of this threatens already vulnerable families even more which is why we are shining a light on this issue and helping to protect people against loan fee fraud.”
Just Credit Union warn that scammers often target society’s most financially vulnerable people – those who tend to be on lower incomes, might have lower credit ratings or limited access to mainstream credit such as credit cards or bank loans.
Added Steve: “We are encouraging Shropshire residents to go through the 3-step loan fee fraud checklist recommended by the Financial Conduct Authority.
“If people are called or emailed, it could be a scam; if they are asked to pay an upfront fee, it could be a scam; if they are asked to pay quickly or unusually, it could be a scam.
“People need to ensure they are dealing with a reputable and registered lender and the Financial Conduct Authority provide a register which is available at fca.org.uk/firms/financial-services-register.
“Those arranging a loan with Just Credit Union will never be charged any arrangement fees, hidden charges or early repayment penalties – and at the same time they will be supporting their local community and economy.”
