Quick answer
Key warning signs: any upfront fee before funds are released, unsolicited contact (cold call, text, or social media), guaranteed approval regardless of credit history, pressure to decide immediately, payment by unusual methods (gift cards, cryptocurrency, bank transfers to personal accounts), and contact details that differ from those on the FCA register. If any of these apply, do not proceed - verify the lender independently on the FCA register first.
The Most Common UK Loan Scam: Advance Fee Fraud
An advance fee scam follows a familiar pattern:
- You receive an unsolicited call, text, email, or social media message from a "lender"
- The lender tells you that you have been approved for a loan - often a significant amount
- They say you need to pay a fee upfront before the funds can be released (insurance, security deposit, processing, administration)
- You pay the fee - and the lender disappears
No legitimate FCA-authorised lender charges an upfront fee before releasing funds. If you are asked for any payment before you receive a loan, that is a scam.
Clone Firm Fraud
Clone firms copy the identity of real, FCA-authorised companies to appear legitimate. They use the genuine firm's name, registration number, and sometimes identical website layouts. They typically make contact via unsolicited calls or texts.
How to protect yourself from clone firms:
- Never use contact details provided by someone who approached you unsolicited
- Go to the FCA register directly by typing register.fca.org.uk into your browser manually
- Search the lender's name on the register and compare the phone number, email, and address listed there with the contact you received
- Any mismatch in contact details is a warning sign - call the number on the FCA register, not the one you were given
Warning Signs to Watch For
- Upfront fees - any payment required before funds arrive
- Unsolicited contact - if you did not apply and did not expect to hear from this lender
- Guaranteed approval claims - no legitimate lender can guarantee this
- High-pressure tactics - "This offer expires in one hour" or "Do not tell anyone about this"
- Unusual payment methods - gift card codes, cryptocurrency, or a personal bank account
- No FCA registration - all consumer credit lenders in the UK must be authorised by the FCA
- No physical address or a PO Box only
- Poor written English in official communications
How to Verify Any Lender
Before sharing any personal or financial information with a lender:
- Go directly to register.fca.org.uk - type the address into your browser, do not click a link
- Search for the company by name
- Confirm they are listed as authorised (not registered or cancelled) for consumer credit
- Cross-reference the contact details on the FCA register with those you have been given
If a lender is not on the FCA register, they are not authorised to offer consumer credit in the UK and you should not deal with them.
If You Have Already Been Scammed
Act quickly:
- Contact your bank immediately - explain you have been defrauded. Banks have procedures for Authorised Push Payment (APP) fraud recovery.
- Report to Action Fraud (the UK's national reporting centre for fraud and cybercrime)
- Report to the FCA at fca.org.uk/consumers/report-scam-unauthorised-firm
- Keep records of all communications - these will support any fraud recovery claim
Frequently Asked Questions
Advance fee fraud involves a scammer claiming to be a lender and telling you that you have been approved for a loan - but that you must pay a fee upfront before the funds are released. The fee is presented as insurance, security, a processing fee, or a refundable deposit. Once paid, the "lender" disappears and the loan never arrives. No legitimate FCA-authorised lender requires an upfront payment before releasing a loan to you. This is the most common loan scam type in the UK.
A clone firm copies the identity of a real, FCA-authorised company - including its name, registration number, and sometimes its website design. They then contact you via unsolicited calls, texts, or social media. To check: look up the lender's name on the FCA register yourself directly (do not follow links from the contact you received). Check the contact details against those listed on the FCA register. If there is any mismatch in phone number, email domain, or address, treat the contact as potentially cloned.
Only if you have verified that the lender is FCA-authorised directly through the FCA register. Legitimate lenders need your bank account details to pay funds to you, and that is normal. What is not normal: being asked to transfer money to an account, pay a fee to receive funds, send cash, or use an unusual payment method like cryptocurrency or gift cards. If any of these are requested, it is a scam.
Report it to Action Fraud (actionfraud.police.uk) immediately. Contact your bank right away and explain that you have been defrauded - banks have a duty to try to recover funds sent by bank transfer under the Authorised Push Payment (APP) fraud rules. If you paid by debit or credit card, your bank may be able to raise a chargeback claim. Report the scam to the FCA at report.fca.org.uk. Contact Citizens Advice if you need guidance on next steps. Every report helps authorities track and shut down active scam operations.
No legitimate lender guarantees approval to every applicant regardless of their financial situation. All authorised lenders in the UK are required to lend responsibly and carry out affordability and creditworthiness checks under FCA rules. Any lender claiming guaranteed approval, no credit check, or 100% acceptance is either making a misleading marketing claim, operating outside the law, or is a scam. Encourage your friend not to proceed without verifying the lender on the FCA register first.
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