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 three years.
So, with Halloween just around the corner and Christmas not too far away, what can be done to help get these monsters off our streets? Greg Potter, Head of Member Experience at Leeds Credit Union, explains.
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.
In the run-up to traditionally expensive times of year – like Christmas – more people may be tempted to turn to loan sharks to help them afford more presents, a holiday or large family celebrations, so now is a vital time to make them aware of the dangers this entails.
Organisations like the Illegal Money Lending Team (IMLT), on the other hand, work 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 close to £100 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, the IMLT hosts regular events, like Stop Loan Sharks Week, to raise 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
This Halloween, 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.
Find out more at www.stoploansharks.co.uk
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 affordable financial services to people in Leeds, Wakefield, Harrogate and Craven.
Image: Shutterstock
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