How to Avoid Loan Scams and Fake Loan Offers (2026 Guide)

Last reviewed: October 1, 2026

This guide explains how loan scams and fake loan offers work, how to tell a scam from a loan that is legal but very expensive, how to verify a lender, and exactly what to do if you have already paid or shared your details. It draws on the FTC, the Consumer Financial Protection Bureau (CFPB), the FBI's Internet Crime Complaint Center (IC3), the FDIC, the National Credit Union Administration, the UK Financial Conduct Authority (FCA) and the Canadian Anti-Fraud Centre. We do not recommend or rank any lender.

This article is general information, not financial or legal advice. Laws differ by country and by US state, and your own situation may need professional help.

How loan scams work

Every loan scam follows the same basic pattern: a criminal pretends to be a lender, promises money that does not exist, and uses that promise to collect a payment, your identity details, or both. The details change, but the goal never does.

Loan scams work because they reach people at a hard moment. Someone who has been turned down by a bank, who has a bill due on Friday, or who is worried about losing a home is more likely to accept an offer that looks like a way out. Scammers know this and go looking for exactly those people. The FTC notes that advance-fee loan scammers buy lists of people who have searched for or applied for payday loans online. The FCA describes the same thing in the UK: fraudsters target people who have already applied for loans on the internet.

The four stages of a typical loan scam

1. The hook. An advert, text, email, social media message or phone call offers a loan on easy terms. Common lines include "bad credit, no problem," "no credit check" and "guaranteed approval."
2. The fake approval. You fill in a form or answer questions and are quickly told you are approved, often for more than you asked for. The speed is designed to make you feel lucky and to stop you thinking.
3. The ask. Before the money can be "released," you must do something: pay a fee, buy gift cards, send back part of a deposit, hand over online banking details, or supply documents such as ID and bank statements.
4. The exit or the squeeze. The scammer either disappears or invents new fees ("tax," "transfer insurance," "anti-money-laundering clearance") until you stop paying. Your details may then be used or sold for identity theft.

Advance-fee loan scams

An advance-fee loan scam is a promise of a loan or credit card in exchange for a payment up front. You pay the fee and the loan never arrives. It is the most common loan scam in the US, the UK and Canada, where regulators call it advance-fee loan fraud, loan fee fraud and loan scams respectively.

How it usually unfolds

The FTC describes the pattern like this. Scammers advertise or call with offers of loans and credit regardless of your credit history. Once you respond, they "approve" you, and then say you must pay before you can get the money. The fee is given an ordinary-sounding name: insurance, processing, an application charge, paperwork, a first repayment in advance, or a deposit to prove you are serious.

The FCA's description of loan fee fraud in the UK is almost identical. It says fraudsters ask for an upfront payment before providing the loan, often blaming your poor credit history, and typically ask for between £25 and £450. They put pressure on you to pay quickly by bank transfer, or ask you to buy a voucher, for example from Google Play, Amazon or eBay. Some claim the fee is refundable. The FCA's summary of what happens next is short: once the fee is paid, you never receive the loan you were offered.

What US law says: the Telemarketing Sales Rule

In the US, the FTC's Telemarketing Sales Rule makes one version of this scam specifically illegal. The FTC's consumer guidance states that it is illegal for telemarketers to promise you a loan or other credit and ask you to pay for it up front.

The rule itself (16 CFR 310.4(a)(4)) lists as an abusive practice requesting or receiving payment of any fee in advance of obtaining a loan or other extension of credit when the seller or telemarketer has guaranteed, or represented a high likelihood of success in, obtaining or arranging that loan. In plain English: if someone on the phone says you are certain or very likely to get a loan, they are not allowed to take a fee before you get it.

Canada takes a similar line. The Canadian Anti-Fraud Centre says that in most provinces it is illegal for a company to request an upfront fee before you receive your loan, and advises never sending money first.

Are all loan fees a scam?

No, and this is where people get confused. The FTC explains that legitimate lenders may charge application, appraisal or credit report fees. The difference lies in how and when:

• A real lender checks your credit report, confirms the information in your application and assesses whether you can repay before offering you credit. It does not promise or guarantee a loan before you apply.
• Real fees are disclosed in writing as part of the loan terms. Many are deducted from the loan proceeds or added to the balance instead of being collected separately in advance.
• A real lender does not ask you to pay a fee by gift card, voucher, cryptocurrency, wire transfer to an individual, or a payment app.
• A real lender does not make approval depend on the fee. Paying a fee never guarantees a loan.

Fake lender websites, apps, impersonation and phishing

A fake lender is a website, app, caller or message that pretends to be a real financial company, or invents one, to collect your money and personal data. Looking professional proves nothing: logos, licence numbers and customer reviews can all be copied or made up.

Fake and cloned lender websites

Some scam sites invent a lender from nothing. Others copy the name, logo and even the registration number of a real, authorised firm. UK regulators call this a clone firm. The Canadian Anti-Fraud Centre warns that fraudulent loan websites impersonate legitimate lending institutions to collect personal information, which then leads to identity theft and fraud.

The FDIC gives a similar warning about banks. It says criminals create fake bank websites to trick people into transferring money or disclosing personal information, and that some fraudulently use the FDIC name or the "Member FDIC" logo to create a false sense of security. Its advice is to compare the bank name with the web address and watch for misspellings, letters out of place, or cases where the real bank's name appears only as a small part of a longer, unrelated address.

Practical checks for any lender website:

• Do not trust a link in an advert, text or email. Type the address yourself, using the address shown on an official register.
• Look for a full legal company name, a physical address and a licence or registration number, then check those details on the regulator's own site, not through a link the lender gives you.

Lender and bank impersonation

In an impersonation scam, the criminal claims to be from a company you already know: your bank, a well-known lender, a loan servicer or a government agency. The FDIC describes a typical bank impersonation: you receive a text about a supposed unauthorised purchase, then a follow-up call from someone posing as bank staff who asks for sensitive information. The FDIC, citing FTC data, notes that bank impersonation was the most reported scam occurring through text messages in 2022, and that a typical consumer who fell for it lost $3,000 and was also at risk of identity theft.

The defence is the same in every case. The FDIC advises calling your bank directly, using a phone number you already know, such as the one on your debit or credit card. Do not use a number, link or email address supplied by the person who contacted you.

Phishing and smishing loan offers

Phishing is a fake email designed to make you click a link or hand over information. Smishing is the same thing by text message. Loan-themed versions include "you are approved for $5,000, confirm your details," "your loan application is incomplete," and "your loan payment failed, update your bank details."

The FTC warns that phishing can lead to identity theft. In the US you can forward phishing emails to reportphishing@apwg.org, forward scam texts to 7726 (SPAM), and report the attempt at ReportFraud.ftc.gov.

Many of the same tricks appear in investment fraud. If you want to see how they look in another setting, our guide on how to spot a crypto scam covers fake platforms and impersonation in more detail.

"Guaranteed approval" and "no credit check" offers

No legitimate lender can guarantee you a loan before it has looked at your application. The FTC says directly that legitimate lenders will not promise or guarantee you a loan or credit before you apply, and it lists adverts such as "Bad credit? No problem" among the warning signs of an advance-fee scam.

How to read the common phrases

• "Guaranteed approval." Treat as a scam signal. The Canadian Anti-Fraud Centre lists companies that guarantee a loan regardless of credit history, and slogans like "good credit, bad credit, apply now," among its warning signs.
• "No credit check." Not always a scam, but never good news. Some legal high-cost lenders, such as payday lenders, do little or no traditional credit checking. The CFPB notes that payday lenders typically do not verify your ability to repay the loan while meeting your other obligations. The price reflects that. If a "no credit check" offer also asks for an upfront fee, it is almost certainly fraud.

If your credit record is the real obstacle, the honest route is slower but safer. Our guide on how to improve your credit score before applying for a loan explains the steps that actually move a score.

Fake debt relief, student loan forgiveness and mortgage relief

Relief scams target people who already have a loan. They promise to cut, cancel or restructure the debt, collect fees in advance and deliver little or nothing. In the US, charging fees before results is restricted or banned for debt settlement, student loan debt relief and mortgage assistance services.

Fake debt relief and debt settlement

Debt settlement companies offer to negotiate with your creditors so that you pay less than you owe. Some are lawful businesses. Many scams copy their language. The FTC's guidance is clear on fees: a debt settlement company cannot collect its fees from you before it settles your debt. The FTC's list of things only scammers do includes:

• trying to collect fees before settling any of your debts;
• guaranteeing to settle all your debts or get you fast loan forgiveness;
• telling you to stop communicating with your creditors without explaining the serious consequences;

Even genuine debt settlement carries risks. The FTC warns about credit damage, continued collection calls and wage garnishment, and notes that any savings from debt relief services could be considered income and be taxable. If you are weighing up ways to deal with several debts, our guide to debt consolidation options and costs compares the legitimate routes.

Student loan forgiveness scams

Student loan scams promise fast forgiveness, lower payments or "special access" to federal programmes, in return for a fee or your account login. The FTC's advice for US federal loan borrowers comes down to three points:

• Start at StudentAid.gov. Log in yourself to see who your loan servicer is and how to reach them.
• Never pay an upfront fee. The FTC states that it is illegal for companies to charge you before they help you, and that there is nothing a student loan debt relief company can do for you that you cannot do yourself for free.
• Never share your FSA ID. Your FSA ID is your StudentAid.gov login. Anyone who has it can get into your account.

If your loans are private, the FTC says to go straight to your loan servicer for help. Applying for federal student aid through the FAFSA form is also free, so a company charging to submit it is selling something you do not need to buy. International students face a different set of options and risks, which we cover in our guide on how to apply for a loan as an international student.

Mortgage relief and foreclosure rescue scams

These scams target homeowners who have fallen behind. The FTC explains that scammers promise a loan modification or other relief, pressure you to pay upfront fees, then disappear without ever contacting your lender.

Under the FTC's Mortgage Assistance Relief Services (MARS) Rule, a company cannot charge you until it has given you a written offer for a loan modification or other relief from your lender and you have accepted that offer. There is a narrow exception for lawyers who are licensed in your state, are providing real legal services and place the money in a client trust account.

The FTC's warning signs for mortgage relief scams are:

• a demand for payment before any service is delivered;
• a request to pay only by cashier's check, wire transfer or a mobile payment app;
• being told to stop talking to your lender or servicer;
• being told to transfer the deed of your home to them, or to make your mortgage payments to them;
• pressure to sign documents you have not had time to read.

Fake checks, overpayments and gift-card "tests"

In this scam, the "lender" appears to pay you first. A check or deposit arrives, and you are asked to send part of it back, pay a fee out of it, or buy gift cards to prove you can repay. The deposit later bounces and the money you sent was your own.

Why the money looks real at first

The FTC explains the mechanism behind every fake check scam (fake cheque scam in the UK). By law, banks have to make deposited funds available quickly. But a check appearing in your balance does not mean it is a good check. Fake checks can take weeks to be discovered, and they often look just like real ones, even to bank employees. When the bank finds out, it takes the money back from your account, and you are responsible for it.

How it appears in loan offers

• The overpayment. You are "accidentally" sent more than the agreed loan and asked to return the difference by wire, payment app or gift card. The FTC notes that scammers always have a good story to explain why you cannot keep all the money.
• The "prove you can repay" test. You are told your credit is weak, so the lender needs proof you can handle repayments. You are asked to make a "test payment," or to buy gift cards and read out the numbers.

The gift card rule

The FTC's position on gift cards is absolute: only scammers will tell you to buy a gift card and give them the numbers off the back of the card. No legitimate business or government agency asks for payment this way. Once you read out the card number and PIN, the scammer can spend the balance even if you still hold the card. The FCA describes the UK equivalent, where fraudsters ask victims to buy vouchers.

If you are ever asked to pay any part of a loan fee with a gift card or voucher, the conversation is over. It is a scam every time.

Identity theft through fake loan applications

Some fake loan offers never ask for money. The application form is the scam. A loan application collects everything a criminal needs to pretend to be you, so a fake one is an efficient way to steal an identity.

A typical loan form asks for your full name, date of birth, address history, Social Security number or national insurance number, employer, income, bank account details and copies of your ID. In real hands, that is routine. In the wrong hands, it can be used to open credit accounts, take over existing accounts or apply for loans in your name. The Canadian Anti-Fraud Centre specifically warns that fake loan sites collect personal information that leads to identity theft and fraud.

How to protect your details

• Verify first, apply second. Do not enter personal details until you have confirmed the lender on an official register.
• Never send ID photos by text or messaging app to a person you have not verified.
• Never share one-time passcodes. A code sent to your phone is for you to type in yourself, not to read out to a caller.

Predatory but legal loans vs outright scams

A scam takes your money and gives you nothing. A predatory loan gives you real money on terms that can do real damage. Both are worth avoiding, but they are different problems with different remedies, and it helps to know which one you are looking at.

Payday loans

The CFPB describes a payday loan as a short-term, high-cost loan for a small amount, typically due on your next payday. Many states limit the loan size, and a common limit is $500. Key facts from the CFPB:

• Loans are usually due in two to four weeks, often in a single payment.
• Many state laws set a maximum fee, ranging from $10 to $30 for every $100 borrowed.
• A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400 percent.
• Some states do not allow payday lending at all. Others permit it with limits.

Auto title loans

A title loan uses your vehicle as security. CFPB research on single-payment auto title loans found that they are usually due in 30 days and typically carry an annualised rate of around 300 percent. The CFPB reported that more than four out of five of these loans are re-borrowed on the day they are due because borrowers cannot afford to pay them off, and that one in five borrowers ends up having the car or truck seized by the lender.

How to tell the difference

The practical point is that "it is a real loan" is not the same as "it is a safe loan." Before accepting a high-cost loan, look at the safer ways to borrow below.

Red flags at a glance

One red flag is enough to stop and verify. Two or more together, especially an upfront fee plus pressure to act now, mean you should walk away.

How to verify a lender

To verify a lender, find it on an official government or regulator register, then contact it using the details on that register. Do both steps. Scammers copy real firms' names and licence numbers, so finding a matching name is not enough on its own.

The three-step check

The FCA sets out a three-step check for UK consumers that works equally well anywhere:

1. Check the firm is authorised and has permission to provide the service you want, using the official register.
2. Check that the firm's contact details match the details on the register.
3. Contact the firm through the details on the register, not through the phone number, email or link given to you by the person who approached you.

Official lookup tools

NMLS Consumer Access

The Nationwide Multistate Licensing System (NMLS) is the system of record for non-bank financial services licensing used by state agencies, and it is operated by the Conference of State Bank Supervisors. Its public site, NMLS Consumer Access, is a free service that lets you confirm that a financial services company or professional is authorised to do business in your state. The CFPB points consumers to it for checking mortgage lenders and brokers. The CFPB adds that you can usually find out whether there has been disciplinary action against a loan originator or company by checking with your state regulator.

UK: FCA Firm Checker, Register and Warning List

The FCA advises always typing the Firm Checker's address yourself and never reaching it through a link in an email, and matching the firm reference number (FRN) and contact details you were given against the official record. Clone firms use a real firm's name and number with their own phone number and email, so the contact details are the part to check most closely.

What a legitimate loan process looks like

A real loan involves an application, a check of your credit and income, written disclosure of the costs before you sign, and then the money, with fees taken as disclosed and not demanded separately beforehand. If the steps you are being asked to follow look very different from this, be careful.

Truth in Lending disclosures (US)

In the US, the Truth in Lending Act (TILA) requires lenders to disclose the cost of credit in a standard way so that you can compare offers. The CFPB explains that a Truth in Lending disclosure includes:

• Annual percentage rate (APR): the total cost of credit, including the interest rate and mandatory fees, expressed as a yearly rate.
• Finance charge: the total interest and certain fees you will pay over the life of the loan.
• Amount financed: the amount you are borrowing.
• Total of payments: the sum of all payments you will have made by the end of the loan.

It also covers items such as the number of payments, late fees and any prepayment penalty. The CFPB says the disclosure should be given before you sign, and that borrowers must be given a fully completed form, not a blank one. If a lender will not put the APR and total cost in writing before you commit, that is a reason to stop. If you believe a real lender failed to give proper disclosures, you can complain to the CFPB.

What to do if you were scammed: a timeline

If you paid a fake lender or gave it your details, act immediately: contact the company you paid through and ask for the payment to be stopped or reversed, then report the scam and protect your identity. Speed matters more than anything else. Some payments can be stopped in the first hours and not afterwards.

Step-by-step timeline (US)

Not sure which agency fits? USA.gov has a directory of state attorneys general and a tool that shows where to report each type of scam.

What to do by payment method

The FTC gives specific advice depending on how you paid:

Card payments generally give you the strongest position. The FTC notes that federal law protects you from unauthorised use of your credit card. Our step-by-step guide on how to dispute a credit card charge in the US and UK explains the dispute process and time limits.

Protecting your credit: freeze or fraud alert

The FTC explains the two main tools in the US:

• Credit freeze. Free. It restricts access to your credit report so that nobody can open a new credit account in your name. It lasts until you lift it. You place it with each of the three bureaus (Equifax, Experian and TransUnion) and lift it when you want to apply for credit.
• Initial fraud alert. Free. It tells businesses to verify your identity before granting new credit. It lasts one year and can be renewed. You only need to contact one bureau, which must tell the other two.
• Extended fraud alert. Free. It lasts seven years and is available if you have an FTC identity theft report or a police report.

If you are in the UK

1. Call your bank straight away, using the number on your card or statement. The FCA says to do this immediately if you have shared personal information or made a payment.
2. Report to Report Fraud, the national fraud reporting service that replaced Action Fraud, on 0300 123 2040 or at reportfraud.police.uk. In Scotland, the FCA says to report to Police Scotland on 101 or to Advice Direct Scotland on 0808 164 6000.
3. Report to the FCA on 0800 111 6768 or through its online contact form. The FCA is clear that it cannot get your money back, but says it looks into every report and that reporting could help protect others.
4. Watch for follow-up scams, which the FCA calls recovery room schemes.

Recovery scams: the second hit

A recovery scam is a second fraud aimed at people who have already lost money. Someone contacts you claiming they can get your money back, for a fee. They cannot, and the fee is the scam.

The FTC explains how this happens. Scammers buy and sell "sucker lists" with the names, addresses and phone numbers of people who have lost money, along with details of the scam they fell for. A caller, emailer or letter-writer then claims to be from a government agency, a law firm or a consumer organisation and offers to recover what you lost.

The rules to remember:

• The FTC says government agencies and legitimate organisations will never ask for money to help you get a refund.
• The FTC's advice is never to pay upfront for a refund or for help with a refund.
• Under the Telemarketing Sales Rule (16 CFR 310.4(a)(3)), a telemarketer offering recovery services may not request or receive a fee until seven business days after the money or item has been delivered to you.
• IC3 says it will never contact you directly for information or money.

Protecting older relatives and students

Older adults and students are frequent targets for different reasons: older people often have savings, home equity and good credit, while students are new to borrowing and are surrounded by real, confusing loan paperwork. A few calm conversations do more than any software.

Older relatives

• Talk about the patterns, not the technology. "Nobody real asks for gift cards" and "nobody real needs a fee to release a loan" are easy to remember.
• Agree a pause rule. Any request for money or personal details that arrives unexpectedly gets a 24-hour wait and a call to a named family member first.

If you believe an older person is being financially exploited, the CFPB advises contacting adult protective services, and it publishes free materials such as Money Smart for Older Americans.

Students and recent graduates

• Use official channels only. For US federal loans, everything can be managed for free at StudentAid.gov and through your loan servicer.
• Never share your FSA ID, and do not let a "consultant" create or hold it for you.
• Never pay for forgiveness or consolidation help. The FTC says there is nothing these companies can do that you cannot do yourself for free.

Safer ways to borrow

If you need money and your credit is not strong, the safest places to start are a credit union, your existing bank, your creditors themselves and a nonprofit credit counsellor. None of them will guarantee approval, and that is a good sign.

Credit unions and payday alternative loans

Credit unions are member-owned, not-for-profit lenders. In the US, the National Credit Union Administration allows federal credit unions to offer small loans called payday alternative loans (PALs). According to the NCUA's consumer site:

• PAL amounts can range from $200 to $1,000.
• The loan term must be between one and six months.
• The application fee can only cover actual processing costs, up to $20.
• You generally need to have been a member of the credit union for at least one month.

The maximum rate on a federal credit union PAL is 28 percent APR, far below the roughly 400 percent APR the CFPB cites for a typical payday loan. Not every credit union offers PALs, so ask.

Nonprofit credit counselling

The CFPB describes credit counselling organisations as usually nonprofit bodies that advise you on money and debts, help with a budget, and can set up a debt management plan. Under such a plan you make one monthly payment to the counselling organisation, which pays your creditors, and creditors may agree to lower interest charges and fees.

The CFPB suggests starting with the Financial Counseling Association of America, the National Foundation for Credit Counseling, or the US Department of Justice's list of approved agencies, and checking any organisation with your state attorney general and consumer protection agency. The FTC adds that a reputable counsellor should give you free information about its services, review your finances in detail before recommending anything, be certified or accredited by an outside organisation and give you fees in writing. Be careful with any "counsellor" that promises to fix all your problems or charges a lot before doing anything.

Loan safety checklist

Run through this list before you apply for, accept or pay anything towards a loan.

• I found this lender myself, or I have independently verified the one that contacted me.
• I checked the lender on an official register (state regulator, NMLS Consumer Access, FDIC BankFind, or the FCA Firm Checker).
• I contacted the lender using details from the register, not from the message or advert.
• Nobody has guaranteed approval before assessing my application.
• I have not been asked to pay any fee before receiving the loan.
• I have not been asked to pay with gift cards, vouchers, cryptocurrency, a wire to an individual or a payment app.
• I have the APR, finance charge, amount financed, total of payments and all fees in writing.
• I have not shared online banking passwords, one-time codes, my FSA ID or remote access to my device.

FAQ

How can I tell if a loan offer is a scam?

Look for three things: an upfront fee before the money is released, a promise of guaranteed approval, and a request to pay by gift card, crypto, wire or payment app. Any one of these is a strong warning sign. Then check the lender on an official register and call it using the contact details shown there. If the firm is not listed, or the details do not match, do not proceed.

Is it normal to pay a fee before getting a loan?

Not as a condition of releasing the money. The FTC says real lenders may charge application, appraisal or credit report fees, but they disclose them clearly and do not guarantee a loan in return. In US telemarketing, it is illegal to take a fee in advance for a loan that has been guaranteed or described as highly likely. In Canada, the Anti-Fraud Centre says upfront loan fees are illegal in most provinces.

Do legitimate lenders ask for gift cards?

No. The FTC says only scammers will tell you to buy a gift card and give them the numbers on the back. If you already did this, call the card issuer immediately using the number on the card, say it was used in a scam, ask for a refund, and keep the card and receipt.

Are "guaranteed approval" loans real?

No genuine lender can guarantee approval before reviewing your application. The FTC states that legitimate lenders do not promise or guarantee a loan or credit before you apply. Offers of guaranteed approval are either scams or marketing for very high-cost loans that still involve an application.

How do I check if a loan company is legitimate?

In the US, search your state financial regulator's licence lookup and NMLS Consumer Access. If it claims to be a bank, use FDIC BankFind. In the UK, use the FCA Firm Checker and Financial Services Register, and look at the FCA Warning List. Then compare the contact details on the register with those you were given, and contact the firm through the register's details.

A lender deposited money in my account and asked me to send some back. What should I do?

Do not send anything. Tell your bank you suspect a fraudulent deposit and ask them to investigate. The FTC warns that funds showing in your account do not mean a check is good, and fake checks can take weeks to be discovered. If it bounces, the bank will take the money back from you.

I gave a fake lender my Social Security number and bank details. What now?

Call your bank to protect or change the account. Go to IdentityTheft.gov to report it and get a recovery plan. Place a free credit freeze with Equifax, Experian and TransUnion, or a free one-year fraud alert through any one of them. Change passwords, turn on two-factor authentication, and check your credit reports at AnnualCreditReport.com.

Can I get my money back after a loan scam?

Sometimes. It depends on how you paid and how fast you act. Card payments can often be disputed. Bank transfers, wires and payment app transfers are harder but still worth reporting immediately. Gift cards and crypto are the most difficult, though the FTC still advises contacting the issuer or exchange. Never pay anyone who promises to recover the money for a fee.

Where do I report a loan scam in the US?

Report to the FTC at ReportFraud.ftc.gov. For online scams, also file with the FBI's IC3 at ic3.gov. Tell your state attorney general. If a real financial company is involved, submit a complaint to the CFPB. If your identity was stolen, use IdentityTheft.gov.

Where do I report a loan scam in the UK?

Call your bank first. Then report to Report Fraud (formerly Action Fraud) on 0300 123 2040 or at reportfraud.police.uk. In Scotland, contact Police Scotland on 101 or Advice Direct Scotland. Also report the firm to the FCA on 0800 111 6768.

Someone says I qualify for student loan forgiveness if I pay a fee. Is that real?

No. The FTC says to never pay an upfront fee for student loan help and that it is illegal for companies to charge before they help you. Log in to StudentAid.gov yourself to see your real options, contact your servicer directly, and never share your FSA ID.

A company called offering to recover the money I lost. Should I trust it?

No. This is almost certainly a recovery scam. The FTC says legitimate organisations and government agencies never charge to help you get a refund, and IC3 says it never contacts victims for money. Hang up and report the call.

Bottom line

Loan scams depend on urgency and on one simple reversal: a real lender gives you money and is repaid later, while a scammer wants your money or your details first. If you remember only that, most fake loan offers fall apart. Guaranteed approval, fees before funding and payment by gift card, crypto or wire are the signals that matter most.

Before you apply anywhere, verify the lender on an official register and use the contact details shown there. Insist on written terms with the APR and total cost. If something has already gone wrong, call your bank first, report it second, and protect your identity third, then ignore anyone who offers to get your money back for a fee. And if you need to borrow, start with a credit union, your own bank or a nonprofit credit counsellor. This guide is general information, not financial or legal advice.

Official sources referenced in this guide

• FTC: What To Know About Advance-Fee Loans
• FTC: Complying with the Telemarketing Sales Rule
• 16 CFR 310.4, Abusive telemarketing acts or practices (text of the rule, via Cornell Legal Information Institute)
• FTC: How To Get Out of Debt
• FTC Consumer Alert: Spotting student loan scams
• FTC: Paying for School and Avoiding Scams
• FTC: Mortgage Relief Scams
• FTC: How To Spot, Avoid, and Report Fake Check Scams
• FTC: Avoiding and Reporting Gift Card Scams
• FTC: How To Recognize and Avoid Phishing Scams
• FTC: What To Do if You Were Scammed
• FTC: Refund and Recovery Scams
• FTC: Credit Freezes and Fraud Alerts
• FTC: What To Know About Identity Theft
• FBI: Internet Crime Complaint Center (IC3)
• CFPB: What is a payday loan?
• CFPB: How can I tell if a payday lender is licensed to do business in my state?
• CFPB: Prepared remarks on the auto title lending research
• CFPB: What is a Truth in Lending disclosure for an auto loan?
• CFPB: How to check whether a company or person is permitted to make or broker mortgage loans
• CFPB: Consumer Complaint Database
• CFPB: Submit a complaint
• CFPB: What is credit counseling?
• CFPB: Fraud and scams
• Conference of State Bank Supervisors: Nationwide Multistate Licensing System (NMLS)
• FDIC: Bank Impersonation Scams and Fake Banks
• NCUA MyCreditUnion.gov: Payday Alternative Loans
• USA.gov: Where to report scams
• USA.gov: State attorneys general
• FCA: Loan fee fraud
• FCA: Firm Checker
• FCA: Protect yourself from scams
• FCA: Report a scam or unauthorised firm
• Canadian Anti-Fraud Centre: Loan scams
• Canadian Anti-Fraud Centre: Report fraud