UK Regulators Turn to Anti-Fraud Jingle to Thwart Holiday Loan Scams

This Christmas, the U.K.’s Financial Conduct Authority (FCA) is taking the fight against fraud to a whole new musical level.

Earlier this month, the financial watchdog announced in a statement that it had launched the country’s first official anti-fraud jingle, “designed to be a lighthearted, engaging way to spread awareness of loan fee fraud advice to consumers this Christmas.”

The song, produced in partnership with behavioral scientists Influence At Work and music production company Soviet Science, is published on the FCA website and can be streamed on Spotify, Apple Music and YouTube.

According to Mark Steward, executive director of enforcement and market oversight at the FCA, last year’s Christmas lockdown robbed people in the country of the pleasure of getting together with family and friends, which is why they “deserve to celebrate this year’s festive period in style.”

But, he said, “it’s a sad fact that scammers will be seeking every opportunity to exploit vulnerable people through loan fee fraud,” at a time when families already have to deal with increased holiday spending.

It’s why the FCA has turned to science and music this Christmas, hoping to engage consumers on the subject of loan fee fraud in a more accessible and memorable way, Steward explained, while encouraging increased vigilance during the festive celebrations and helping consumers better identify the warning signs of loan fee fraud.

These signs include a consumer being contacted out of the blue by someone offering a loan after they’ve made multiple loan applications, a request to make an upfront payment into a bank account, a request to transfer money via an unusual method or pressure to pay the fee quickly.

As Steward said: “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 authorized to provide credit before taking out a loan.”

The recommendation to take this creative extra step to fight fraud during the Christmas period, as compared to the rest of the year, is not by chance. Data from the FCA shows that more consumers get scammed between November and January as compared to the rest of the year, as many people are more likely to take out loans during that time to fund higher holiday expenses.

According to the FCA, a total of 1,456 instances of reported loan fee fraud were reported during those three months, costing victims an average loss of £274 per fraud. And while one in 20 calls the FCA received during that period was to report an instance of loan fee fraud, there were 32% more loan fee fraud calls per month between November and January than the rest of the year.

A 2020 survey conducted by the FCA also revealed that close to 30 million adults in the U.K. “had characteristics of ‘vulnerability,’ making them more susceptible to scams of this type,” the statement noted.

A National Security Threat

As if those figures weren’t alarming enough, the U.K. is dealing with a wider fraud epidemic — which, according to the trade association UK Finance, has reached a level that makes it a “national security threat.” 

Read more: UK’s Banking Protocol Helps Stop $44M in Scam Attempts in First Half of ’21 

A recent report from the banking industry lobby group cited in a PYMNTS study on authenticated payments showed that scam attempts totaling £32 million ($44 million) were made between January and June of this year alone, while another PYMNTS report revealed that 73% of companies in the country suffered data breaches that stemmed from phishing within the past year. 

Related news: 73% of UK Businesses Suffered Phishing-Related Data Breaches in Last 12 Months

Digital fraud involving cryptocurrencies is also on the rise, leading to over £146 million ($201.2 million) in virtual currency-related losses in the first 10 months of this year, representing a 30% increase compared to the amount lost during the whole of 2020.

Read the PYMNTS report: No Phishing: Multilayered Defense Best Way to Keep Fraudsters Empty-Handed

Fighting this widespread fraud epidemic will no doubt take time — and for now, the FCA is focused on ensuring that people in the U.K. are able to enjoy this Christmas holiday armed with their anti-fraud jingle.