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With households already under increasing financial pressure from high inflation and rising interest rates, the U.K.’s Financial Conduct Authority (FCA) is warning about a growing threat from fraudsters seeking to take advantage of the added financial stress of the holiday season.

The FCA issued a warning about loan fee fraud, noting that reported cases are already up by 21% from last year.

Additionally, FCA research suggests that households may be more vulnerable to fraudulent schemes at this time of year due to both the rising cost of living, and the pressures that accompany the holidays, which can lead to “poorer and riskier” financial decisions.

“With the incidence of loan fee fraud – where a consumer pays a fee for a loan they never receive – already rising, the FCA’s latest research highlights a heightened risk to vulnerable consumers of being pressured into falling for this scam at Christmas,” the regulator said.

Fraudsters seek to add to households’ financial pressures and to lure them into loan fee schemes, it warned, adding that with households under increased financial stress due to prevailing economic conditions, more of them may be tempted to take out loans to help fund their holiday expenses.

“At a time of heightened stress and pressure, scammers and illegal lenders will rush consumers into bad decision making,” said Mark Steward, executive director of enforcement and market oversight at the FCA, in a release.

“Some consumers may be tempted to take out loans to meet these extra costs. Unfortunately, this is where loan fee fraud scammers and illegal lenders see an opportunity,” he added.

FCA research has also found that just 22% of consumers are able to identify all of the warnings signs of these kinds of schemes. In response, it has launched a public education campaign designed to warn consumers about the growing risk of these frauds.