FCA’s Christmas‑Cricket: Tackling Loan‑Fee Fraud Before the Holidays
With Christmas nearly upon us, the Financial Conduct Authority (FCA) is rolling out a new campaign to stop scammers from preying on families’ holiday budgets. The aim? Keep homes from falling into slippery debt traps just when the firewood is cold.
Why the Urgency Is Real
- Money‑worries high as Santa’s sleigh – 40 % of UK adults feel uneasy about pulling enough cash for Christmas. For parents of children under 18 the worry jumps to 52 %.
- One in four (29 %) parents already borrowed or plan to borrow just to keep the lights on and gifts in stock. The average amount taken out has swelled from £305 last year to a snowy £412 this year.
- Debt‑assessment figures from Debt Free Advice show an 83 % spike in new debt complaints between December 2022 and March 2023 versus the same period last year.
- Scammers are happy to play at the expense of generous families. A typical loan‑fee fraud – where the borrower pays a fee for a loan that never materialises – costs roughly £255 on average.
The 3‑Step Scam‑Free Checklist
When you’re eyeing a loan, run this quick test before you click ‘accept’:
- Cold‑call or email? ALERT! Might be a scam.
- Upfront fee? ALERT! Could be fishy.
- Urgent payment or unusual instructions? ALERT! Likely a scam.
Stuck? Use the FCA Register to check the lender’s credentials before you sign anything that feels too good to be true.
Partnering for Relief
The FCA has teamed up with Debt Free Advice, a coalition led by Toynbee Hall, to support those drowning in debt. They provide:
- Financial advice
- Debt‑management plans
- Support for mental well‑being during high‑stress holiday periods
“Fraudsters know how eager parents are to give kids a memorable Christmas. Key in those situations: the 3‑step scan, and don’t let loan lemons ruin your yuletide joyousness,” says Therese Chambers, FCA Enforcement Director.
Matt Dronfield, Managing Director of Debt Free Advice, warns, “The holiday season pushes families into debt that can affect everything from mental health to finances. We’re here to give a lifeline before the debt snowball rolls full force.”
Remember
If you find yourself with an unauthorised lender, you won’t be covered by the Financial Ombudsman Service or the Financial Services Compensation Scheme (FSCS). Stay vigilant – the holiday season is not the best time for financial mischief.
