Although the problems caused by loan sharks are well known, recent reports into the number of people turning to them for financial help have revealed that a staggering three million Britons have used their services over the last 3+ years. So what can be done to help get them off our streets? Greg Potter, Head of Member Experience at Leeds Credit Union, explains.
Designed to raise awareness of the issue of illegal money lenders and the risks they pose, the England Illegal Money Lending Team’s (IMLT) annual Stop Loan Sharks Week took place recently.
Stop Loan Sharks Week works by offering people advice on how to recognise the signs that someone might be involved with a loan shark, what to do about it and where to get help.
What exactly are loan sharks?
Loan sharks lend money to people who are struggling to make ends meet and who may have been turned down for a loan from reputable sources like credit unions or banks. They promise to provide them with a quick and easy loan, only to apply sky-high APR rates, trapping their financially vulnerable victim in a cycle of debt, before resorting to intimidation and violence until the loan – plus interest – is repaid in full.
The IMLT, on the other hand, works with local communities, educational facilities and the police to investigate and prosecute loan sharks, and offer support to those who owe them money. The IMLT is estimated to have written off more than £87 million worth of illegal debt since 2004, highlighting just how serious the issue is.
To try and put a stop to this illegal activity once and for all, Stop Loan Sharks Week raises awareness of the help that is available to people who have been targeted by illegal money lenders by encouraging conversations among friends, families and communities.
How do credit unions combat loan sharks?
Credit unions pride themselves on looking after their members’ financial wellbeing. While they might not be out on the streets tracking loan sharks down to throw them behind bars, there are plenty of things they can do to stop illegal money lenders from taking advantage of financially vulnerable individuals.
This includes lending money at affordable rates to their members, which helps keep them out of the hands of loan sharks and means they don’t have to worry about high interest repayments. They also offer access to savings accounts and money and budgeting advice, so their members can avoid coming into contact with loan sharks altogether.
Seeking help if you’re in debt
If you have borrowed from an illegal money lender or are worried about someone else who may have, you can contact the IMLT team 24/7 on 0300 555 2222 or fill out a secure online form here to report a loan shark.
You can also seek help from your local credit union, who can offer support and advice, and whose products and services can help you get your finances safely back on track.
Leeds Credit Union provides straightforward and affordable financial services to people in Leeds.
Photo: IMLT officers work with the Police to arrest suspected loan sharks
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