HOUSEHOLDERS are being warned about doorstep cold callers offering cash loans.

Trading standards officials fear people might be tempted to take advantage of the money on offer, particularly with Christmas stretching many pockets.

Complaints reported to the service have shown that the annual percentage rate (APR) charged for loans is sometimes more than 1,000 per cent.

One incident in Malton, North Yorkshire, involved a group of doorstep traders cold calling on homes and offering householders immediate cash loans.

The act of offering unsolicited cash loans at someone's house is an offence against the Consumer Credit Act 1974.

Councillor Carl Les, North Yorkshire County Council's executive member for business and community services, said: "The Consumer Credit Act legislation was made to protect consumers from high pressure doorstep selling techniques, where householders are pressurised into signing loan agreements at grossly overpriced credit charges.

"An example of the type of loan provided is usually around the £100 mark and the interest charged over a short period of only a few weeks works out at over half the amount borrowed.

"The calculation of the actual APR works out to be many hundreds per cent.

"This is a despicable practice particularly in a climate where interest rates on loans are at a virtual all-time low.

"These sharp practices are aimed at vulnerable low income householders."

Trading standards officers believe such incidents are more common then people think, as salesmen prey on those who are desperate for money, and their victims rarely report it to the authorities.

Michael Welsh, principal trading standards officer for Hartlepool Borough Council, said: "We would warn people to be wary of anyone offering loans at this time of year.

"Don't be tempted on the doorstep to committing yourself to any sort of financial transaction that can get you seriously into debt.

"Often, the people targeted by these companies are the ones who can least afford the kind of interest rates which might be considered to be extortionate."

Anyone suffering from debt problems can seek advice from their local Citizens Advice Bureau.