The Financial Conduct Authority has launched its first ever Christmas jingle in a bid to protect consumers against loan fee fraud over the festive period.
The anti-fraud jingle comes as last year the FCA received 32 per cent more loan fee fraud calls per month across the festive season than the rest of the year, with one in 20 calls between November and January reporting an instance of loan fee fraud.
In the last year, the FCA also registered 1,456 instances of reported loan fee fraud, with victims reporting an average loss of £274 per fraud.
Loan fee fraud is when consumers are asked to pay an upfront fee for a loan or credit that they then never receive.
Commenting on the song, Tim Morris, IFA at Russell & Co, said: “After watching the jingle, it does sound quite cheerful and could put them in a different light. They certainly drummed home who they are with the 'FCA' message popping up regularly.
“I think that’s a good approach as many of those being scammed probably aren’t aware of what they do. Some are not even aware who they are, so anything to increase their profile and proactively protect consumers is good with me.”
The regulator said the jingle was designed to be a light-hearted, engaging way to spread awareness of loan fee fraud advice to consumers this Christmas.
In partnership with behavioural scientists Influence at Work and music production company Soviet Science, the song has been produced by the FCA in hopes that it will make consumers more aware of the risks of loan fee fraud as Christmas approaches.
The FCA said it hopes consumers will better understand how to spot a potential fraud and know to check FCA guidance online if they are contacted by somebody offering a loan.
However, it has not been welcomed by everyone.
Joseph Young, financial planner and director at Masterplan Wealth, said: “It's well-intended but the FCA, true to form, completely misses the point by announcing it via a stoic press release on their website, which no one outside of the industry ever reads.
“It’s also dreadfully put together, I reckon I could get something better done on Fiverr for about £50. Although I’m sure it cost them a fortune, paid for with our fees.”
Meanwhile, the regulator’s financial lives research found that 27.7m adults in the UK have characteristics of ‘vulnerability’, making them more susceptible to scams of this type.
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.”