Credit Management September 2023

AS households continue
to grapple with the costof-living
crisis, there is a
rising risk of fraudsters
targeting already vulnerable
consumers looking to cover the cost of
spending over the summer period.
New research from the FCA has
found that over half of UK adults
(55 percent) are more worried about
personal finances than they were last
year. And it means there is a rising risk
of fraud.
Rising food (63 percent) and energy
costs (53 percent) were cited as the
biggest concerns. However, summer
related spending is compounding this,
with entertainment costs (24 percent),
and summer holidays (22 percent)
being the next most prominent
financial worries. And while 46 percent
of UK adults have gone or plan to go
away this year on a summer holiday,
more than a third (35 percent) are
NEWS ROUNDUP
FCA warns against prevalence
of Loan Fee Fraud
worried about how they are going
to pay for it. This is driving many to
fund summer spending either through
savings or credit. According to the
research, 18 percent of consumers will
use savings to fund summer spending,
and 12 percent are turning to credit
cards. With 24 percent of consumers
turning to credit or loans to fund
additional summer related spending,
loan fee fraudsters could use this as
an opportunity to steal money from
consumers.
When asked how they plan to fund
their spending, 21 percent of parents
responded that they either had already,
or were planning to, take out a loan
to cover cost. Other areas of concern
included the costs associated of having
children at home for the summer (32
percent), funding summer related
activities for children (24 percent) and
back to school costs (24 percent).
Loan fee fraud - where a consumer
pays a fee for a loan they never receive
– typically results in a £260 loss.
This type of fraud usually peaks in
the summer months and is growing
year-on-year. The FCA’s data shows
that last summer, there was a 26
percent increase in complaints from
consumers who had fallen victim to
loan fee fraud compared to 2021.
Steve Smart, Executive Director of
Enforcement and Market Oversight,
at the FCA says that summer
spending comes at a time of enhanced
vulnerability for many: “For fraudsters,
this provides the perfect opportunity to
take advantage of people considering
how to make ends meet,” he explains.
The FCA urges consumers looking
for a loan to do the three-step check to
protect themselves from scams: ignore
cold calls or unsolicited emails; don’t
pay upfront; and be dubious if asked
to act quickly or unusually. In any of
these scenarios, it could be a scam.
UK’s hospitality businesses
being let down by Government
THE majority of the UK’s hospitality
businesses believe the industry is
overlooked by the Government.
A survey by Peckwater Brands of 250
decision-makers in senior management
positions within UK hospitality
businesses (restaurants, takeaways,
cafés and bars). It found that over threefifths
(62 percent) of UK hospitality
businesses believe their sector
receives less support and attention
from the Government than other
industries.
This comes as many hospitality
business struggle with rising overheads,
staff shortages and falling consumer
spending, leading 4,600 to close their
doors in the 12 months leading up to
March 2023.
When asked what support could
be beneficial to the sector, 28 percent
of businesses believe employment
incentive programmes would make
a positive difference, with 21 percent
wanting additional visa opportunities
for foreign workers who could work in
hospitality.
Two in five (40 percent) would
welcome an extension of energy bill
relief, while 36 percent would like to see
the return of ‘Eat Out to Help Out’ or a
similar initiative. In a move to cut costs,
48 percent have renegotiated with or
changed their supplier in the past year,
with a further 44 percent planning on
doing so in the next 12 months.
Sam Martin, CEO of Peckwater
Brands, says it’s no secret that
the current economic climate for
hospitality businesses is brutal:
“Between skyrocketing costs, huge
staffing challenges and lower demand
as customers tighten their purse
strings, many businesses feel they can’t
catch a break following the hardship of
the pandemic.
“Signs that food price inflation is
starting to fall may be welcome among
business owners, but our research still
shows they believe external support is
the key to returning to their rightful prepandemic
status.
“While favourable taxes, support
schemes and legislation would
undoubtedly benefit hospitality
businesses, such intervention is not
guaranteed. So, decision-makers must
remain prepared to seek out solutions
themselves. Embracing innovation and
optimisation could be the thing that
separates the businesses which prosper
in the future and those that don’t.”
Brave | Curious | Resilient / www.cicm.com / September 2023 / PAGE 10