Fraud on the rise as cost of living soars, FCA warns

Financial Conduct Authority

The UK’s top financial watchdog sounded the alarm over rising fraud rates today as scammers look to swoop on vulnerable consumers amidst a cost of living crunch.

In a statement this morning, two Financial Conduct Authority chiefs said fraud rates were climbing across the board, with loan fee fraud – where scammers ask people to pay up front for loans that never materialise – rising particularly sharply.

Soaring costs and increasingly hard-up consumers had presented an opportunity for opportunistic scammers, the FCA warned.

“The rising cost of living is making 2022 a hard year financially. And there are scammers out there looking to make it even harder,” said Mark Steward, executive director of Enforcement and Market Oversight and Sheldon Mills, executive director of Consumers and Competition at the FCA.

“Scammers are cruel. They target society’s most financially vulnerable – those who tend to be on lower incomes, might have lower credit ratings or have limited access to mainstream credit.”

The watchdog has now relaunched its campaign to stamp out loan fee fraud in particular and urged borrowers to check whether any lenders are on the FCA register.

“If you are asked to pay an upfront fee, if you’re asked to pay quickly or to pay in an unusual way, such as vouchers or money transfer, then it could be a scam,” Steward and Mills said.

The warnings come just one day after think tank the Social Market Foundation said that the UK was the “card fraud capital of Europe” with higher and more costly levels of scams than any other European country.

The UK suffers on average 134 frauds per 1000 people with scammers making off with £8833 per 1000 people, it found via analysis of European central bank data.