So they have devised a cruel scam to kick them when they are down.
The gangs work by advertising loans. If you sign up for one, they will ask you to pay an up-front fee before the loan can be arranged. Once you have paid, they disappear without a trace.
These scams have been lurking for a while. There were just over 2,000 complaints about them two years ago. However, last year, the number soared, with well over 3,000 complaints. The OFT has now issued a warning to tell consumers to give these criminals a wide berth.
There are some legitimate credit brokers out there who ask for a fee before arranging the loan. In fact, an estimated 270,000 people use them every year as they grow increasingly desperate for the cash to make ends meet. The fact they ask for the fee is clearly cashing in on those who can least afford it, but if they come up with the cash then they are at least doing what they have promised.
How to protect yourself
The OFT warns that the best way to protect yourself its to avoid those companies charging an upfront fee altogether. There are still ways to get hold of cash legitimately, without having to spend money you cannot afford. The OFT is actually keen to close down this sort of loans company, as it believes the way they operate may be detrimental to consumers.
If you are still keen to use the services David Fisher, of the OFT says it's essential to investigate the company offering the loan: "We advise people to check out the company carefully before agreeing to anything, including asking for a landline number, a physical address and doing a search about the company online, as well as checking that they have a valid credit licence," he says.
However, if you regularly find yourself borrowing large sums then the solution is not simply to find more ways to borrow: it's a question of examining your spending and your lifestyle to find a way to live within your means.
This is, of course, far easier said than done, but in the final analysis there's no alternative: what you have coming in has to be the same as what you have going out or you will eventually fine yourself in serious trouble: and the longer you put it off with these sorts of loans, the more trouble you will find yourself in.
But what do you think? Would you use this sort of service? Let us know in the comments.