Shropshire residents warned over illegal money lenders
Shropshire residents are being warned not to be tempted by a ‘quick fix’ when they have a shortfall of money.
Just Credit Union, Shropshire and Telford & Wrekin’s not-for-profit savings and loans co-operative, issued the advice after research conducted by IPSOS on behalf of Fair4All Finance suggested more than three million people have borrowed from an unlicensed or unauthorised money lender in the last three years.
A separate report focused on people’s experience of dealing with a ‘loan shark’ which highlight the relative ease that people can access thousands of pounds from illegal moneylenders in towns and cities around the UK.
Steve Barras, development officer at Just Credit Union, said: “While users of illegal money lenders generally borrowed hundreds rather than thousands of pounds at a time, the total amount of debt per borrower was significant, at around £3,000 on average.
“Repayment rates were different, but invariably involved paying double. However, a lack of transparency or awareness of the total cost of credit was commonly reported.
“The report also shows that with increasing numbers of people struggling through the cost of living crisis, illegal moneylenders appear to be targeting lower income workers with an income of around £20,000 to £25,000.”
Mr Barras added: “Loan sharks do not necessarily fit the stereotype profile many people have and they may at first appear to be a friend helping out with a small loan. However, the potential harms are significant.
“Whilst the research found that actual violence was rare, the ongoing threat of it was common with loan sharks using a variety of coercive controls to ensure they get paid. This included threats to family members and children and other harms such as sexual harassment and forced labour.”
The report, entitled ‘As One Door Closes’, identifies a reduction in the availability of at home or ‘doorstep lenders’ has created a gap in the provision of small amount loans which is being exploited by the loan sharks.
Just Credit Union says there was even evidence of former collectors for now defunct home credit businesses continuing their operations illegally. As part of their recommendations the report calls for an acceleration of the take-up of community-based finance providers like Just Credit Union.
Mr Barras said: “Just Credit Union provides affordable loans from as little as £300 and we are a safe place to borrow from. We also ensure all our members have savings accounts so they can start to build a safety net.
“Anyone in the area borrowing or saving with us is also helping their community as the money people save with us is lent to local people in the same community and interest on loans funds the running of the credit union rather than corporate profits.”
For more information visit justcreditunion.org
