Lloyds Bank alerts customers to new loan scam which sees victims lose hundreds of pounds | Personal Finance | Finance
The bank is on the alert as this type of fraud appears to be on the rise and could result in its customers giving away hundreds of pounds by accident. Loan scams occur when someone is asked by a scammer who is pretending to be a legitimate lender to pay an upfront fee for a loan. This type of fraud often appears as an online advertisement for a fast loan which attracts people desperately looking for money.
Victims are commonly contacted by criminals after searching online for a loan and entering their contact details onto a website they believe to be legitimate.
After this, the fraudster usually impersonates a representative from a genuine company and sends over documentation which looks accurate.
Once the victim is approved for this “loan”, the scammer will make up a reason why an upfront payment will need to be completed for the person to receive any money.
After an initial payment, the fraudster usually asks for more money until the person they are targeting begins to get suspicious.
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In its advice to customers, Lloyds shared the common reasons criminals give to trick people into giving away their cash.
These include payment release fee and payments to verify someone’s identity during a transaction.
Criminals will also ask for people to pay loan company costs and processing fees to continue to appear legitimate.
With victims now losing around £200, Lloyds is sounding the alarm that their customers need to be on the lookout for advance fee loan scams going forward.
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Liz Ziegler, the bank’s Retail Fraud and Financial Crime director, warned that customers are at risk of being targeted at any time while they are shopping online.
Ms Ziegler explained: “Organised crime gangs will ruthlessly exploit any change in consumer behaviour.
“We saw that during the pandemic with the surge in purchase scams as certain goods became scarce and more people shopped online.”
Lloyds’ crime expert shared what consumers should look out for to identify if they are being scammed into parting with their money.
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She added: “Now, as living costs rise, fraudsters are increasingly turning to advance fee scams.
“They know that some people will need more support with their money, and victims in these cases often have a poor credit score or may already be in financial difficulty.
“The important thing to remember is that a genuine loan company will never ask for an upfront payment before releasing the funds.
“If you’re concerned in any way about your finances there are lots of organisations that can help, and it always makes sense to speak to your bank first.”
On the Action Fraud website, a breakdown of how other advance fee scams can manifest is available to those concerned.
This list includes dating and romance scams, where fraudsters impersonate someone on dating apps and criminals impersonating officials.
As well as this, families can be targeted in inheritance scams and loan fraud through this type of crime.
Furthermore, some criminals commit fraud involving fake lotteries, prize draws and sweepstakes.
