Sleigh no to loan sharks
At a time when households are under extreme pressure with mounting living costs, there is growing concern that unscrupulous lenders known as loan sharks could try to cash in on the festive period by offering ‘fast cash’.
- Nearly one in ten people turned to loan sharks to cover the costs of Christmas last year.
- More than half of victims turned to illegal money lenders in order to pay for essentials such as utilities, food and fuel in the first half of 2022.
- A report published by the Centre for Social Justice estimated that 1.08 million people could already be in debt to an illegal money lender
Loan sharks are dangerous and tend to target people who are vulnerable. At first, they may appear to be a friend who is helping out, but very quickly they can become threatening and aggressive, charging extortionate interest rates and abusive practices that can have devastating consequences.
Follow these safety tips to protect yourself and loved ones from loan sharks:
- If you’re struggling to make ends meet and need cash fast, the thought of a loan shark might seem tempting, but remember these lenders are not your friends. Debt can quickly spiral out of control – it’s important to think carefully before taking out a loan and consider other options.
- Never send money or give credit card, online account details or copies of personal documents to anyone you don’t know or trust. This information is valuable so make sure you protect it from criminals who can use it to find and stalk you, harass you or threaten those you love.
- If you’re thinking about borrowing money, it’s important to check that your lender is genuine. Loan sharks operate illegally without the correct permission from the Financial Conduct Authority (FCA). Do your research first and check the firm or person you’re dealing with is listed on the Financial Services Register.
- When exploitative loan sharks are preying on hardship, it’s vital for people to know there is an ethical, local, not-for-profit alternative available. Credit unions are a lifeline for many people, with their services helping members to save regularly, borrow responsibly and keep track of their finances. There are other community lenders who are mostly not for profit, and who reinvest any surpluses into serving vulnerable customers, which can be found which can be found on the Finding Finance website.
- Getting trapped in a never-ending spiral of debt after borrowing from a loan shark can have devastating consequences, not only on your finances but also on most other aspects of your life, including your mental health, work and relationships with your family and friends. If you’re worried about a friend or family member, or if you need help yourself, Stop Loan Sharks can offer confidential advice and support.
If you need to borrow money to pay for Christmas, please choose a lender carefully. Just Credit Union advises that if you need to borrow make sure:
- Borrowing is planned
- It is affordable
- It is from a reputable registered organisation.
To find out more about borrowing safely over Christmas please click the following links
If you are worried about a friend or family member who is being taken advantage of by a loan shark, contact the Stop Loan Sharks 24/7 Helpline on 0300 555 2222. They offer free confidential advice and support to anyone affected by illegal money lending or visit www.stoploansharks.co.uk. Live Chat is available on the website between 9am and 5pm, Monday to Friday.
