Homeowners across the country are being targeted by bogus loan fraudsters attempting to take advantage of the stricter financial qualifications High Street Lenders are asking for from customers requiring a personal loan.

It is becoming apparent that the credit crunch and the new austerity measures imposed by the present government, has inspired a whole new industry to spring up around borrowing money and most of it is illegal. The fraudsters have discovered members of the public already in significant debt are particularly vulnerable to the scam and are now targeting these people.

The scam works in a number of ways, the basic scheme comes into operation when a member of the public receives a cold call, text or email from an unknown company offering loans at very good rates, usually far better than a person with a bad credit rating can get from a High Street Bank. The customer is told that the loan repayment conditions are indeed true and that all they have to do is pay an administration fee up front. Of course once the victim pays the fee he or she finds that the loan company is suddenly untraceable and the money is lost.

The crafty crooks, however, don’t just rely on this method.  If they feel the basic rip off fee is not going to work on a particular victim they will still try to take advantage of the personal details they have gleaned from them. Bank account details, dates of birth and of course addresses are often disclosed before the victim realises the loan company is not exactly bona fide, and these can lead to even more sinister crimes such as phishing and identity fraud. Crimes which leave the victim with an empty bank account but also continuing problems with credit in the future.

Avoiding this nightmare situation is easily done by just using common sense measures when dealing with financial matters. Never, ever, pay an upfront administration fee. Even respected banks often now put administration fees on loan deals so the scam sounds plausible but always insist any fees will only be paid once the loan is in place. If this can’t be done then try somewhere else. Remember the old adage “Too good to be true”. If a deal sounds too good to be true then it more than likely is.

It is nearly always possible these days to buy legal cover with your household insurance policy; victims of scams should remember this when trying to recover their losses.