Warning on loan sharks targeting people ahead of Christmas
Around 1.1 million people a year borrow from illegal money lenders.
Last updated 2nd Dec 2024
With the countdown to Christmas well underway, people across the West Midlands are being warned against turning to loan sharks to pay for the festive season.
Latest figures from the England Illegal Money Lending Team show around 2 per cent of the population, around 1.1 million people a year, end up borrowing money from illegal lenders.
And with presents to buy, food to put on the table, and mounting energy costs - December can often put greater financial strain on families.
Cath Wohlers is an operations manager with the England Illegal Money Lending Team, and said Christmas is often a 'trigger point' for people struggling with debt.
"They've had an eviction notice, or they've had a red bill, or they've had a bailiff turn up. And that's been the problem.
"They've maybe ignored their debts a little bit, and then they've got to a crisis point and panicked, and borrowed money.
"The problem is that people think they are borrowing from a friend, so in the run up to Christmas everything is hectic and you're more prone to making decisions which aren't great."
One of the messages from the Illegal Money Lending Team is that anyone can become a victim to a loan shark, regardless of age or background.
Cath added: "Last year, the youngest person we helped was 19 and the oldest was 91. Just as likely to be male or female, we've had significant numbers who are homeowners and in full-time employment, as well as people on lower incomes."
What is a loan shark?
According to the Citizens Advice website, a money lender has to be authorised by the Financial Conduct Authority (FCA) to lend money legally. Money lenders who aren’t authorised by the FCA are breaking the law. They are known as loan sharks.
Loan sharks often work from home, charge very high rates of interest and don't give you much paperwork to confirm the arrangements they've made with you. A loan shark usually has lots of customers and lends money like a business, but their lending is illegal.
Loan sharks often take other illegal action to collect the money they've lent you, such as threatening violence or taking away your credit cards or valuables. In extreme cases, they've been known to force non-payers into prostitution and drug dealing.
Getting help
If you're owing money to what you believe to be a loan shark, it's advised you contact the Illegal Money Lending Team.
Tel: 0300 555 2222
Email: reportaloanshark@stoploansharks.gov.uk
Website: www.stoploansharks.co.uk