Protecting yourself from advance fee scams 

Keeping you and your money safe is our top priority, and we have stringent safeguarding measures in place to help protect all our customers. But there are also steps you need to take to protect yourself from fraud.  

To help you identify potential scams and stay safe, we’re publishing a series of articles on fraud protection. This article looks at how to protect yourself from advance fee scams.  

What are advance fee scams? 

Advance fee scams are a type of fraud in which fraudsters trick victims into paying an upfront fee for goods, services, or rewards that never materialise.  

These scams can take on many forms, but the common factor is that the scammer requests payment before delivering on a promised benefit. 

Here are some common types of advance fee scams: 

1. Lottery or prize scams 

Scammers often trick people into believing they’ve won a huge prize in a lottery, competition, or sweepstake. However, before they can claim their ‘winnings’, victims are told they must pay a processing fee, tax, or administrative charge. In reality, there’s no prize, and the scammers disappear with the money. 

2. Loan scams 

These scams target individuals who are in urgent need of financial assistance. Fraudsters will pose as legitimate lenders offering quick and easy loans, even to those with poor credit scores. They demand an upfront payment, often disguised as an ‘insurance fee’ or ‘processing charge.’ Once the victim pays, the scammer vanishes, and the loan is never issued. 

3. Job and employment scams 

Scammers will lure victims with fake job offers that promise high salaries, flexible working hours, and great benefits. However, before starting the job, applicants are asked to pay for training, background checks, or work materials. Once the money is sent, the job offer turns out to be fake, and the scammer ceases all contact. 

4. Romance scams with advance fee requests 

Fraudsters take advantage of people seeking companionship by creating fake online profiles and building emotional connections with their victims. Over time, they fabricate urgent financial problems, such as medical emergencies or travel expenses, and ask for money. Despite promises of repayment or future meetings, once the victim sends money, the scammer disappears. 

5. Investment scams 

Victims are tempted with investment opportunities that promise exceptionally high returns, such as cryptocurrency investments, real estate deals, or exclusive business ventures. Scammers will demand an initial deposit or administrative fee to secure the ‘investment’, but once the money is sent, the fraudster disappears, and the investment never materialises. 

An example of an advance fee scam 

James was looking for a loan to pay off some of his debts when he found an online lender that would approve him quickly without checking his credit.  

He quickly applied and was told he had been approved! But, before receiving the funds, he was told he needed to pay a £250 processing fee. 

Desperate for financial relief, James made the payment. However, after sending the money, he received no further communication from the lender.  

He later discovered the company didn’t exist, and that he had fallen victim to an advance fee scam. 

Five tips to protect yourself from advance fee scams 

1. Be careful of upfront payment requests 

Legitimate businesses will never ask for an upfront payment before delivering what they promise. If you’re asked to pay an advance fee for a loan, prize, job opportunity, or investment, consider it a major warning sign.  

Scammers will often pressure victims to act quickly, making it seem like an urgent requirement. Before handing over any money, take a moment to verify the legitimacy of the request and question why the payment is necessary. 

2. Verify the legitimacy of companies and individuals 

Before committing to any financial transaction, do your due diligence. Research the company or individual thoroughly by checking official websites, reading customer reviews, and confirming their credentials with relevant regulatory bodies.  

If a company lacks an online presence, has multiple complaints, or refuses to provide verifiable contact details, it’s best to steer clear. Scammers often use fake identities or impersonate legitimate businesses, so double-check all details before continuing. 

3. Never share personal or financial information with strangers 

Scammers often use convincing tactics to gain access to your sensitive data. They may ask for your banking details, identification documents, or passwords using the excuse of verifying your identity or processing a transaction. 

Be highly cautious about sharing such information, especially if you’re communicating with someone online or over the phone. Always ensure you’re dealing with a legitimate company before providing any personal details. 

4. Be wary of high-pressure tactics and too-good-to-be-true offers 

Fraudsters often try to rush their victims into making quick decisions by claiming an offer is limited or that immediate action is required to avoid missing out. If someone’s pressuring you to pay an upfront fee for an incredible opportunity, take a step back and assess the situation carefully.  

If an offer seems too good to be true – whether it’s an investment with guaranteed high returns, a job that pays exceptionally well with minimal effort, or a prize you don’t recall entering – it’s likely a scam. 

5. Use secure payment methods 

When making transactions, you should make sure to use a secure and traceable payment method, such as credit cards or reputable online payment services that offer fraud protection.  

Avoid sending money via wire transfers, prepaid debit cards, cryptocurrency, or cash, as these payment methods are difficult to track and recover if something goes wrong. If a company insists on being paid through untraceable methods, consider it a major red flag. 

What to do if you’re targeted by a scam 

If you believe you’ve been targeted by an advance fee scam, it’s important to act quickly to minimise any potential damage.  

If you’ve already transferred money, reach out to your bank as soon as possible. They may be able to stop the transaction or help you recover your funds. 

You should also report the scam to the appropriate authorities. In the UK, you can report fraud to Action Fraud, the national reporting centre for cybercrime and fraud.  

You can also report the platform where you encountered the scam. Whether the scam was found on a job board, social media, or an online marketplace, reporting it can help prevent others from falling victim. You can do this at National Cyber Security Centre (NCSC).  

More information on fraud prevention 

Advance fee scams are just one of many ways fraudsters might try to deceive their victims, and staying informed and vigilant is the best way to protect yourself from falling prey to these and other scams.  

If you’d like to learn more about different types of fraud and how to safeguard your finances, why not explore our other fraud prevention guides. 

If you’ve already been affected by fraud, you don’t have to face it alone. Organisations such as Citizens Advice and Victim Support offer valuable resources and expert assistance for those who have experienced scams. Seeking guidance from professionals can help you navigate the next steps and prevent further financial harm. 

If you’re a customer of Currencies Direct and notice anything suspicious, or have concerns about the security of your transactions, don’t hesitate to reach out to us! We’re here to help ensure your money remains safe and secure. 

By staying alert and taking proactive measures, you can protect yourself and your finances from fraud.