The jump in interest rates to the highest levels in decades has led to a big increase in mortgage scams, according to banks and regulators.

Since the cost of borrowing began rising two years ago, a growing number of people in the US and the UK have lost money to vendors who promise below-market rates in return for an upfront fee, only to disappear when it comes time to close the loan.

Lloyds Bank says the number of so-called advance-fee scams reported by their clients rose by 19 per cent last year, after climbing 83 per cent in 2022. In the US, according to numbers from the Federal Trade Commission, there were nearly 26,000 reported cases of abuse of advance-fee loans last year, costing victims nearly $75mn. That was down from a 2022 peak of $99mn, but still significantly more than what victims had lost to such rackets before interest rates started rising two years ago.