Fears more people in Harrogate and Dales will turn to loan sharks as Universal Credit uplift ends
Nearly 10,000 households across the Harrogate district were on Universal Credit last August
Last updated 19th Oct 2021
There are fears more people across Harrogate and the Dales will be forced to turn to loan sharks as families wake up to a ÂŁ1000 a year cut to their Universal Credit.
Earlier this month, the ÂŁ20 a week uplift to the benefit officially came to an end, which has started fears of vulnerable families falling prey to illegal money lenders who target struggling to pay the bills or feed their kid.
Figures from the Department for work and Pensions show that nearly 10,000 households across the Harrogate district were on Universal Credit last August
The charity Crime Stoppers has issued a warning some families could turn to illegal lenders to put food on the table.
Read More: 25% cut to young peoples Universal Credit could put thousands at risk of homelessness
Edward Pickering, CEO of Citizens Advice in Harrogate, says it's dangerous getting involved with loan sharks and as it can quickly get out of people's control:
"It's one of those things that can spiral - a person can start off borrowing just ÂŁ10 or ÂŁ20 and then end up, a few weeks down the line, being told they owe ÂŁ500 - that clearly isn't right. It's extortionate at the end of the day.
"The problem with loan sharks there is absolutely no regulation - there is no come back. If you borrow money from a regulated organisation which is overseen by the FCA, there is come back where as a loan shark could just turn up on people's doorsteps, demanding the money back there and then."
Ruth McNee, from Crimestoppers, said: "If you borrow from a loan shark it's actually only going to make things much worse. They use so many psychological threats and coercive control to try and get the money in. Of course, they're not looking for just that original loan back, they put huge levels of interest payments on so the debt soon spirals out of control.
"Sometimes believe that if they've borrowed money from a loan shark that they've broken the law. I think that is something people get afraid of, and the loan sharks play to that and they'll say 'you've broken the law because you've borrowed money from a loan shark', and that's just not true.
"It could be anybody. Some of the signs to spot to protect yourself from this is if you're borrowing money, and you're able to perhaps borrow it in cash or in a bank transfer, and there is no paper work. Then of course they may resort to intimidation or threats of violence."