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Loan shark awareness. A new campaign has been activated this month to encourage people to discuss the dangers of loan sharks and show what kind of support is available to people who have been affected by illegal money lending.
Here’s a small checklist to see if you’ve borrowed from a loan shark:
Research conducted by the Centre for Social Justice estimates that just over a million people may be borrowing from a loan shark; a figure that has more than trebled since 2010.
Loan sharks are criminals who lend money at huge rates of interest, threatening borrowers if they do not pay, but also controlling them so that they owe money for as long as possible by adding unreasonable interest rates that are virtually impossible to break out of.
The England Illegal Money Lending Team (IMLT) is running its national Stop Loan Sharks Week campaign from the 26th September to 2nd October 2022 to detail what help is available to people targeted by loan sharks, and encourage conversation about these dangerous criminals among families, friends, neighbours, customers, colleagues and communities through the #LetsTalkLoanSharks campaign.
The campaign also encourages professionals to discuss loan shark techniques with their clients, to make sure they are aware of the dangers, whether they seem vulnerable to them or not.
A third of people who have borrowed from loan sharks are reportedly reluctant to report their situation due to their own personal sense of shame and/or threats from the loan shark to keep the deal secret.
MoneyMagpie’s Jasmine Birtles says, “Loan sharks are having a field day as the Cost of Living bites and many vulnerable families feel they have nowhere to turn. However, there are charities and organisations around now that can help. Of course, the debt advice charities such as StepChange, Citizen’s Advice, DMA and Christians Against Poverty can help and are able to put people in touch with fair, often charity-backed lenders.
Also, if the need is not desperate, it’s a good idea to join your local credit union as they are able to lend small amounts to members once they have been on the books for a few months at least. As an ambassador for Fairer Finance https://www.fairerfinance.com/ I know that efforts are being made to make fair loans accessible to all but it is a slow process and we need more government-backed help for those most in need.”
As we bulleted at the top of this story, there are loan shark warning signs such as loans without paperwork, impossibly large rates of interest, as well as detectable changes in behaviour from the person you know, or signs that they are giving personal or valuable items away.
Debt is a very difficult thing to manage, let alone, discuss, so the person in debt may feel shameful and isolated, as well as anxious to even discuss their problem. As we often say at MoneyMagpie, the first and best step in such matters is to find a sympathetic ear before rushing to any rash actions.
If you’re worried about confronting someone you wish to help, there are subtle ways of asking the question of loan sharks. Try asking if they need any help with anything, that you’re available to talk and that if they’re struggling financially, you would understand if they had been forced to make unusual efforts to find money. Offer them a friendly ear to open up the conversation.
Finally, if you or someone you know has been affected by loan sharks, confidential advice and support is available from the Illegal Money Lending Team. Call the Stop Loan Sharks 24 Hour Helpline on 0300 555 2222. The #LetsTalkLoanSharks campaign will run across the Stop Loan Sharks England social media accounts and aims to raise awareness of loan sharks, the dangers they pose and share practical tips on how people can protect themselves.
MoneyMagpie: Secure Vs Unsecure Loans explained here.