Fears over increased use of illegal money lenders to cover rising cost of living and Christmas expenditure.
According to the England Illegal Money Lending Team (IMLT) which runs the Stop Loan Sharks initiative "nearly one in ten of those who borrowed money from loan sharks last year did so to cover the costs of Christmas".
Loan sharks are people who lend money for profit (to at least two other people) without authorisation from the Financial Conduct Authority. Whilst there's no single profile of a loan shark, their typical behaviours include not providing credit agreements or receipts, requiring repayments weekly and in cash, and using manipulation or the threat of violence. Loan sharks target vulnerable people seeking credit and trap them into a cycle of debt with exorbitant interest rates and threats.
The IMLT is concerned that "unscrupulous lenders could try to cash in on the festive period as households struggle to cope with rising food, fuel and energy bills."
Avoiding loan sharks
The England Illegal Money Lending Team (IMLT) provides a Stop Loan Sharks Helpline offering confidential advice and support to anyone affected by illegal money lending.
As part of its #SleighNoToLoanSharks campaign to prevent people from falling prey to loan sharks before or during the Christmas period, IMLT has issued the following reminder of safety tips to protect yourself and loved ones:
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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.
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Never send money or give credit card, online account details or copies of personal documents to anyone you don’t know or trust.
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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).
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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.
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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.
England Illegal Money Lending Team / Stop Loan Sharks
Quaker Social Action and loan sharks
The Money Guiders England Network, which QSA runs on behalf of the Money and Pensions Service and which provides free learning opportunities for anyone involved in providing money guidance, recently hosted an online training event in partnership with Stop Loan Sharks. If you're involved in supporting people around money matters, in a paid or voluntary role, you can join the Money Guiders England Network by completing a simple form here.
QSA's Made of Money financial wellbeing project, which works with households living on low incomes in east London and elsewhere, aims to cover the issue of loan sharks with people participating in our groups.