You have a house, a large mortgage and all the usual bills keep coming through the letterbox: electricity, gas, telephone, credit card. You are committed to building an extension to your house, but loans have become expensive and it would use up all of your savings. To make matters worse the housing market is looking shaky.

A kind friend – let’s call him Fred – says: “Don’t worry, I’ll lend as much as you need to get through the month. Just pay me a little above the bank rate. No need to worry about collateral, but if you insist then pledge that car of yours.” The car is new – a 2006 CDOx model that looks great but is terribly unreliable. Good luck to Fred if he ever has to sell it.