A WARNING against signing up to so-called cheap loan offers and cut price mortgages has been issued by the Association of Chartered Certified Accountants (ACCA).

It follows the publication of research highlighting a growing trend of debt problems in the United Kingdom.

The report reveals that consumer debt problems have increased by 39 per cent over the past four years.

The majority of people seeking advice had problems arising from bank loans, credit and store cards, catalogue purchases or hire purchase.

There is particular concern over the practices of some debt consolidation companies, which have been accused of preying on the most vulnerable people, already short of cash, who believe they can borrow their way out of debt.

Chas Roy-Chowdhury, head of taxation at ACCA, said: "We are seeing an unprecedented level of advertising by lenders.

"While many are legitimate, unwary customers, particularly those who already have financial problems, may find themselves attracted to high cost deals when turned down for a loan on the high street.

"There are examples where loan companies have charged customers very high interest rates and then used unfair fine-print terms to pile on even more charges.

He added: "Many home owners today are borrowing against the equity in their homes.

"The continued buoyancy of the property market should not be taken for granted, particularly as the manufacturing sector is already in recession.

"Before committing to long-term loans whose terms will outlive the boom conditions of the past few years, home buyers should consider carefully the implications for themselves of any economic downturn."