Lloyds Bank has issued an “urgent warning” to consumers as the number of advance fee scams jumped 82% in 2022.
Advance fee scams happen when a victim is asked to pay an upfront fee for goods or services that never arrive, such as for a loan, a rental property or even a new job.
Fraudsters are targeting those who are financially less secure, the bank said, with victims losing £711 on average.
While this is below the average loss in 2021, £1,194, Lloyds suggests fraudsters are pursuing a higher volume of lower-value scams.
London saw the highest number of cases in the UK, although the West Midlands was a particular hotspot, where the incident rate was 20% higher than the national average.
25- to 34-year-olds are most likely to fall victim, while analysis suggests those living in deprived areas are twice as likely to be targeted than those in less deprived areas.
“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,” said Liz Ziegler, fraud prevention director at Lloyds Bank.
Loan fee scams are also of particular concern, the bank said.
Fraudsters may impersonate a known lender, or simply create a false company, and ask for payments before a loan can be released, with this specific type of scam up by 105% compared to the previous year.
Common reasons given by scammers to victims for requiring payment include an insurance fee, a verification fee, and a processing fee.
Lloyds urges customers to do their own research and avoid companies that can guarantee loans regardless of credit status.
The bank also stresses that no genuine company would ask for an upfront fee for a loan.