Borrowers have been warned to beware companies offering to arrange homeowner loans for an upfront fee.
The Citizens Advice bureau says that increasing numbers of dodgy lenders are approaching people with credit problems and offering loans of up to £10,000 – at a price.
Once the fee, usually between £30 and £60, has been paid the loan rarely materialises, and if it does is below the amount offered and charges exorbitant interest rates.
In a further cruel twist of the knife, the information number attached to the offer charges a premium rate and keeps them on the line as long as possible without giving any help.
“These conmen prey on vulnerable individuals and promise them a low-interest loan as an easy solution to their money problems,” said Peter Tutton of Citizens Advice.
“Unfortunately in most cases there is no loan and this is just a front for scammers looking to make a quick buck.
“If the loan advertisements do not mention an arrangement fee but suddenly request a fee on application, be very wary. If you are asked for an advance payment alarm bells should ring – avoid at all costs firms who ask for money up front,” he added.
© Adfero Ltd