Beware of these five recession vultures

In these tough economic times, many companies will seek to take advantage of vulnerable people for their own gains. Fool.co.uk is warning consumers to read the small print when considering any financial products - especially the following:

Credit Card Cheques
These cheques are often sent to customers for use at retail outlets that don't accept credit cards. While this might seem helpful they often include transaction fees which are typically 3% of the value of each cheque. So, writing a credit-card cheque for £500 could land you with a fee of £15.

Store Cards
While appealing for their offers of discounted goods, they have extremely high interest rates with some charging almost 50% more interest than credit cards.

Payday loans
This is a cash advance on your salary, with ridiculously high APRs. Payday loans are unregulated, and online advertising has become increasingly aggressive in the recent economic downturn.

Logbook Loans
Similar to payday loans, these are unregulated and horribly expensive. Such loans are secured against your car, which you have to temporarily transfer to your lender. If you do not pay, your car can be sold at an auction and if it does not raise enough cash, you can be pursued for any outstanding debt.

IVA Companies
An Individual Voluntary Arrangement could seem ideal if you are in serious debt. However, you will be expected to pay your creditors 100% of your disposable income for five years. You are also likely to be required to release equity from your home, which will be used to help repay your debts.

Ed Bowsher, financial expert at Fool.co.uk says: "All of us are becoming increasingly concerned about our finances but it is important not to panic and to stay alert to avoid getting into more financial turmoil.

"It is important consumers read the small print when considering any financial product. If it looks too good to be true, it usually means it is. If you are tempted by these products, seek independent advice before purchasing them, especially if they look suspiciously tempting.

"At times like this many financial solutions might appear to be an ideal quick fix. However this can be avoided, if you are struggling to make payments talk to your lender, and if you do use a store card or credit card cheque - ensure you pay the amount off in full each month."