Citizens Advice Warns Against Bogus Loans

Fri, 18 Jun 2010

The Citizens Advice Bureau is warning consumers to be wary of lenders offering bogus loans in exchange for a fee. Credit remains difficult to obtain from mainstream sources, with high street banks and lenders remaining cautious as they seek to solidify their finances, fresh from the lessons of risky lending that brought about the credit crunch .

This caution has left many borrowers desperate for alternative lenders of personal loans, and has also seen a concomitant increase in the number of companies duping consumers with the promise of loans, which may never materialise once the borrower has paid the company an upfront free. The companies are taking a number of forms, either advertising on the internet, or contacting borrowers directly either by text of cold calling.

The loans typically vary between £35 and £2,000, according to Citizens Advice, and in some instances offer interest rates which are too good to be true when considered alongside the rates being offered on loans by rival lenders.

As noted earlier this week, it is not only lenders who are scamming consumers, but some companies are fronting as brokers who can set consumers up with a loan.
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