The Citizens Advice Bureau in the UK is warning desperate consumers to be aware of the abundance of loan scam companies. With the rising debt level in the UK and other adjoining countries throughout the world, people are falling prey to the unscrupulous practices of the lenders. The rising unemployment level is also forcing most UK residents to take out loans to finance their education, home, car and many more financial obligations. The lending companies often prey on those people who are desperate to find a way out of their distressed financial condition. Read on to know some more facts on UK loan scams.

UK loan scams – Some common loan scams explained

Loan scam companies offer unsecured loans to financially weak borrowers in lieu of hefty upfront fees. The loan that you’re trying to advantage of is also not available and if it is, you’ll be charged sky-high interest rates. As a financially responsible citizen, you must be aware that the loan scammers can contact you in various ways. You can see advertisements of the scam companies in newspapers; you may receive unsolicited letters through the post or by e-mail.

Most loan scam companies will target those consumers who do not have the best financial track record, and who would normally struggle to get a loan. The debtors who can’t manage loans in the traditional way are those that are preyed upon by the predatory lenders. They are promised loans after they provide the creditors with their bank details and blank check, including an upfront fee amounting to £30 – £60. The companies will tell you that this is the loan arrangement fee. Most lenders will demand the payment of the upfront fees within the first month. As they get the money from you, you can rest assured that you’ll never get the loan.

How to prevent loan scams in the UK and stay financially safe?

You must ensure that you do not respond to the unsolicited letters and advertisements, specifically to those lending companies that charge hefty upfront fees for their services. If you’re unsure about any transaction or about any letter, you must immediately contact the Consumer Direct to get the required help and come out of this precarious financial situation.

Never provide a company with your personal details, bank details, credit card numbers and account numbers until you know the details of that company. If you’re unaware of the authenticity of that credit card company or debt relief company, check online to know about their credibility and the quality of services provided by them. Don’t agree to a loan over the phone and always give more stress on written documentation. Fill up all financial information before taking out loans to avoid further discrepancies.

If you are going through dire financial straits and you don’t know where to go for help, you can take resort to the UK debt relief companies only after judging their efficiency. Ask family and friends and check the consumer feedback of a particular company before deciding to takeout unsecured or secured loans from that company.

Author Bio: Mark Dawson writes for the the Loan Arrangers where you can compare cheap loans and apply online for UK home loans, and loans for bad credit.

Category: Finances
Keywords: bad credit loans,loan scams,secured loan,loans