VULNERABLE families who can't get bank finance are being urged to be on their guard against 'too good to be true' loans.

The number of people contacting the Torbay Pound service has leapt by 40 per cent in the last quarter, to 443. The service says its Torbay clients owe a total of £580,000 in debt.

Of those, 31 have borrowed a total of £29,464, an average of £950 per client, around half for rent deposits and the rest for rent deposits and rent in advance.

Torbay Pound says that, by borrowing money through its service rather than going to a typical high-interest lender, the 31 have between them saved £45,960 in interest.

The organisation is one of 50 taking part in the series of events organised by Torbay Council and its partners next month to help families hit by the credit crunch.

These include a conference on December 4 bringing together representatives from the business and voluntary sectors, community forums and roadshows.

It will look at how Government, public, voluntary and private sector organisations and services can work together.

The council-backed Torbay Pound offers access to a bank account, affordable loans, saving schemes and help with budget management.

Steve Opie, of South West Pound Limited, a not-for-profit company that runs Torbay Pound and provides support for people who cannot normally access mainstream bank facilities, said they were mainly known among people on low incomes, benefits and tenants of housing associations.

All clients receive a full assessment of their benefits and whether they are able to save money by changing the way they pay for goods and services.

The group introduced a rent deposit scheme in Torbay to help private tenants find rental property where their cases are supported by Torbay Housing Services.

Mr Opie said this scheme has been over-subscribed since it started in August by almost three times the expected number.

"We are also seeing more people with middle incomes being referred. People have lost an income or lost overtime, for example, in the building trades or service industries, on which they depended to pay off credit card debts.

"Our intervention is hopefully preventative, by encouraging people to better manage their finances early, they avoid getting caught up in paying thousands of pounds in interest rates."

Speakers at the conference are Peter Gripaios, professor of applied economics at Plymouth Business School, and Jon Bright, regional director of Government Office South West.

The conference will be followed by the first in a cross-Bay series of community forums open to all residents and business people and featuring a variety of organisations and services including: Cool Recovery, Torbay Pound, Age Concern, the Learning and Skills Council, Warmzone, Torbay Council Housing and Benefits, Surestart and Citizen's Advice Bureau.