Little Loans Featured on the BBC's 'Morning Live' Programme, Warning of the Risk of Loan Fee Scams

Date published: 23rd February 2023

This week, Little Loans compliance manager Alex was featured on BBC's 'Morning Live' programme, where he discussed the topic of loan fee fraud with Rav Wilding and advised customers how they can avoid falling victim to this scam.

You can watch the programme above or on the iPlayer here - the feature starts at the 9:47 mark. Alternatively you can read the transcript of the segment below.

For more information about loan fee scams and how to spot them, visit our guide here.

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Rav Wilding (Voiceover):

"Lloyds Bank recently issued an urgent warning to the public, as they have seen a massive 82% rise in ‘advanced’ or ‘loan fee’ scams over the past 12 months."

Rav Wilding:

"Also known as ‘loan fee fraud’, scammers offer people a loan on the condition that they pay an upfront fee or additional fees. But the money never materialises, leaving everyone that has paid those fees permanently out of pocket."

Rav Wilding (Voiceover):

"Last year the Financial Conduct Authority, or FCA, found that the average loss to a victim of loan fee fraud was £260. And it’s not just individuals who are suffering. The scammers are often pretending to be legitimate loan companies, so the victims think they are dealing with a reputable company – which means the real companies are victims too. Maybe not financially, but certainly reputationally."

"Alex Kosuth-Phillips is the compliance manager of Little Loans, whose image is being used by scammers."

Alex Kosuth-Phillips:

"It’s been happening to us for the whole ten years that we’ve been trading, but we’ve seen a 900% increase when we look at 2021 vs 2022."

Rav Wilding:

"A 900% increase is a staggering amount."

Alex Kosuth-Phillips:

"So on a daily basis we receive multiple numbers of reports from customers who have been targeted by these scammers. They’re being targeted with attractive loan offers, so loans that your bank can’t offer, usually around an APR of about 10 - 12% and what they’re doing is they are asking the customer to provide bank details in the first instance to make it look legitimate and then once the customer is on the hook they will ask for a £50 fee, usually bank transfer but can be in the form of an Amazon voucher, a Steam voucher or a money transfer."

Rav Wilding:

"And the customer will never get the money they thought they were going to get in the first place?"

Alex Kosuth-Phillips:

"No, they’ll completely disappear off the face of the Earth and that’s when they come to me. And what they’ll do is they will come to our website and they’ll go, "I’ve just paid this, where’s my money?". 9 times out of 10, it’ll be that the customer has been scammed."

Rav Wilding (Voiceover):

"And incredibly, as we were filming, exactly that happened."

Rav Wilding:

"You’ve just been handed this by one of your colleagues, and can you just explain to me what this is and how significant this is?"

Alex Kosuth-Phillips:

"So, this is a customer that’s recently come through our contact form and has asked for confirmation that the offer they’ve been sent is valid, which it‘s not."

Rav Wilding:

"Is this person at risk of being scammed?"

Alex Kosuth-Phillips:

"Absolutely, this person is probably in the process of handing over bank details to scammers and then the scammers are going to follow up and ask them for the initial £50 processing fee."

Rav Wilding:

"That’s extraordinary, literally whilst we’ve been sat here talking about this very thing it’s happened, right now."

Rav Wilding (Voiceover):

"But worryingly for Alex, some victims do more than just email."

Rav Wilding:

"Some people call you, thinking you’re the people that are responsible, when of course you’re not. Others actually physically turn up here, and what sort of experience have you had there?"

Alex Kosuth-Phillips:

"We had a gentleman on Christmas Eve come in, very irate, he was being very, very aggressive with us because he’d been scammed out of, I think it was £250, and we had to really calm him down and give him all of the facts and say listen this is what’s happened to you, it’s very unfortunate but we can’t help them, we’re helpless."

Rav Wilding:

"So, as a business, do you feel victims here?"

Alex Kosuth-Phillips:

"Absolutely, our reputation’s tarnished."

Rav Wilding (Voiceover):

"But there are a few extremely simple ways to avoid getting caught out and wrongly blaming a real company."

"Mark Stewart is from the FCA which has a register of legitimate lenders that anyone can access to avoid falling victim to this form of scam."

"Mark Stewart (FCA):"

"The FCA website contains links to the register so you can find out what legitimate companies are located near where you live. Also use the addresses and telephone numbers on our register. That’s really important because we know some scammers will clone the name of a real firm, they will use that firms name, so use the addresses and telephone numbers on the register as well."

Rav Wilding:

"So it’s just that extra level of checking. Mark, in terms of a genuine company, would they ever ask for people to pay an upfront fee in order to get a loan from them?"

Mark Stewart:

"No, no – that’s not what the real firms do. If you get asked for an upfront fee it’s a big red flag that you are not dealing with a legitimate lender, you’re dealing with a scammer."

Rav Wilding:

"Money might be tight right now, but if you’re struggling, go to a source you can trust and ask for help. There are legitimate and safe ways to get yourself out of financial trouble. But paying an upfront fee for a loan, whether it seems to good to be true or not, is certainly not one of them."