Action Fraud, a service run by the National Fraud Authority, issued an alert last week, warning borrowers about a new type of fraud to have emerged recently.
The fraud is targeting those who have taken out a personal loan and involves the victim being sent a letter from a company with a similar name to an existing lender, or loan firm.
The letter states that the recipient has missed a repayment deadline and now owes the original debt plus more money.
However Action Fraud is urging people to be on their guard and to read their mail carefully, as some victims have already sent the requested money to the fraudsters, before finding they still owe the original company.
It is thought that the fraudsters are targeting heavily indebted areas.
According to the organisation, a number of victims contacted Action Fraud in just one day and the matter is now with the National Fraud Intelligence Bureau (NFIB).
Action Fraud takes crime reports from victims of fraud and provides them with a crime reference number. This information is then fed to the NFIB – run by the City of London Police – for analysis and possible police action.