FCA turns to science and music to protect public from loan fee fraud this Christmas

The FCA has launched the UK’s first official anti-fraud jingle in a bid to protect consumers against loan fee fraud over the Christmas period.

  • Last year the FCA received 32% more loan fee fraud calls per month across the festive period than the rest of the year, with 1 in 20 calls between November and January reporting an instance of loan fee fraud
  • The FCA’s anti-fraud jingle is designed to be a light-hearted, engaging way to spread awareness of loan fee fraud advice to consumers this Christmas

Loan fee fraud is when consumers are asked to pay an upfront fee for a loan or credit that they then never receive. The FCA typically receives more reports of loan fee fraud during the festive period than at any other time of the year, accounting for 1 in 20 calls received between 1 November 2020 and 21 January 2021.

In partnership with behavioural scientists INFLUENCE AT WORK and music production company Soviet Science, the song has been produced to land the FCA’s loan fee fraud guidance in a way that is simpler, more memorable and more shareable for consumers than ever. The FCA hopes that in doing so, consumers will be more aware of the risks of loan fee fraud as Christmas approaches, better understand how to spot a potential fraud and know to check FCA guidance online if they are contacted by somebody offering a loan.

In the last year, the FCA registered 1,456 instances of reported loan fee fraud, with victims reporting an average loss of £274 per fraud. FCA Financial Lives research also found that 27.7 million adults in the UK have characteristics of ‘vulnerability’, making them more susceptible to scams of this type.

Last year, the FCA recorded an average 32% increase in loan fee fraud reports per month during the festive period (November to January) compared with the rest of the year, as many people increased their spending to buy presents and celebrate with friends and family, making them more likely to seek credit from loan providers.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:

‘After last year’s Christmas lockdown, which saw friends and family unable to be together, the UK deserves to celebrate this year’s festive period in style. During what is already a period of increased spending for families, it’s a sad fact that scammers will be seeking every opportunity to exploit vulnerable people through loan fee fraud.

‘Scammers can target anyone, so my message is simple: if you are contacted by text, call or email with the offer of a loan. Stop. Think. And go to the FCA’s register to check the firm’s details and make sure it is authorised to provide credit, before taking out a loan.

‘Our FCA jingle is here to engage consumers on the subject of loan fee fraud in a more accessible and memorable way, which we hope will encourage increased vigilance to better protect them and their festive celebrations.’

Steve Martin, CEO of INFLUENCE AT WORK and Faculty Director of Behavioural Science at Columbia Business School, said:

‘We’ve known for a long time how persuasive music and rhyme can be. Songs and sonnets aren’t just effective attention grabbers. Studies show people find their messages more memorable, and even rate them as more believable than the same words spoken.

‘Every day we face a near constant onslaught of messages, delivered by a myriad of messengers in a multitude of ways. Unfortunately, some are designed to trick or scam us. Anything that can be done to keep us vigilant can help. Which is why the FCA’s anti-fraud jingle is to be applauded.’

The jingle is published on the FCA website and can be streamed on Spotify, Apple Music and YouTube.

Spotting the warning signs of loan fee fraud

The FCA has a loan fee fraud page with advice on how to spot a potential scam, including being:

  • contacted out of the blue and offered a loan after making several loan applications
  • asked to make an upfront payment into a bank account, or transfer money via an unusual method
  • put under pressure to pay the fee quickly

The FCA strongly encourages anyone agreeing to a loan to check who they’re dealing with via the FCA Register.

Notes to editors

  1. Anti-fraud jingle video
  2. Loan fee fraud page