Loan Scams
Fake lenders that demand upfront 'fees', insurance or deposits before releasing a loan that never arrives.
Last reviewed: 1 June 2026
What this scam is
A loan scam offers easy credit — often to people refused elsewhere — but demands payment before any money is released. The loan never arrives; the upfront 'fees' are the scam.
How it works
You apply via an ad, text or call and are 'approved' regardless of your credit. Then come demands for an advance fee, 'insurance', or a 'good faith deposit' to release the funds. Each payment is followed by another request.
Common red flags
- Guaranteed approval with no credit check
- Any fee required before the loan is paid out
- Pressure to pay via gift cards or transfer
- Lender not authorised by your financial regulator
Sanitized example messages
Illustrative, sanitized examples. Personal details are replaced with placeholders such as [phone number] and [fake link].
Congratulations, your £5,000 loan is approved! Pay a £199 insurance fee to [fake link] to release funds today.
Payment methods used
- Gift cards
- Bank transfer
- Money transfer
- Cryptocurrency
Who is usually targeted
- People with poor credit
- People in financial difficulty
- Students
What to do immediately
- Stop paying — legitimate lenders deduct fees from the loan, not before it
- Contact your bank if you paid
- Check the lender on your regulator's register
- Report to your national fraud service
Evidence to preserve
- The advert/message
- Payment records
- Any 'loan agreement' documents
Where to report it
- Action Fraud (UK) — UK national fraud & cybercrime reporting centre
- FTC ReportFraud (US) — US Federal Trade Commission fraud reports
- FBI IC3 (US) — US Internet Crime Complaint Center
- Scamwatch (Australia) — Australian competition & consumer reporting
- Your bank's fraud line — Use the number on the back of your card or in your banking app — never a number the caller gives you
Always verify reporting routes and emergency contacts on the official government or agency website for your country.
Frequently asked questions
Do real lenders ever ask for upfront fees?
Legitimate lenders take fees out of the loan or charge them as part of repayments — they do not ask you to pay by gift card or transfer before releasing money.