Don't get bitten by a loan shark this Christmas

27th November 2015
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Help with loan sharks

Christmas can be costly, and this year as more and more people find themselves strapped for cash, illegal money lenders more commonly known as loan sharks have been known to take advantage. These criminals are to be avoided at all costs. They offer loans without the correct permission from the Financial Conduct Authority and as such, are breaking the law.

An estimated 310,000 households borrowed from a loan shark this year, with some victims saying they took out a loan to fund Christmas. Often people find that they are paying for this well into the New Year and beyond.

Loan sharks can target those who would struggle to access credit through legitimate sources. They are often friends with the borrower at first but once payments are missed many will become intimidating, threatening or violent.

Loan sharks rarely offer paperwork, keeping their borrowers in the dark. They will often refuse to tell the borrower how much they owe, how much longer they have to pay and how much interest they are paying on top ( in some cases interest has been as high as a staggering 131,000% APR).

One victim, who originally borrowed £150 to cover Christmas was still making payments 5 years later having paid out over £5000.

However help is at hand from a national team, cracking down on loan sharks. The England Illegal Money Lending Team will investigate and prosecute loan sharks for illegal money lending and any offences linked to this.

Beverley Parker from Financial Action and Advice Derbyshire, a pressure group set up to help people struggling to make ends meet said,

“If you believe you have borrowed from a loan shark, contact the England Illegal Money Lending Team in confidence. They will be able to help. And if you need to borrow money for Christmas talk to your local credit union or community bank”.

There are a number of ways you can contact the team, by phoning the 24/7 confidential hotline on 0300 222 5555, by email to reportaloanshark@stoploansharks.gov.uk or you can find out more from the webpage which is www.direct.gov.uk/stoploansharks