Loan sharks are exploiting the cost-of-living crisis to prey on the most vulnerable families.
They are circling, knowing that many local people are going to be facing difficult choices between feeding their family and heating their homes, and may be thinking of turning to these highly volatile loan options.
Loan sharks use social media channels such as Facebook, Instagram, and Snapchat to target their victims. Some are even targeting struggling households by approaching parents at school gates.
The public are being urged to not contact loan sharks during the cost-of-living crisis, no matter how desperate they are.
Loan sharks aren’t authorised by the FCA which means they are illegal. At first, their offers can look like a suitable short-term fix but very quickly rising interest rates mean rocketing payments, with people owing many times what they first borrowed. According to the ‘Centre for Social Justice’ an estimated 1.08 million people are borrowing from these illegal lenders in England.
Credit unions, debt charities and food banks say they are hearing increasing reports of people resorting to loan sharks for everyday basics. The illegal money lending team shared data that 52% who had borrowed from loan sharks this year had done so to pay for food and fuel.
The ‘Stop Loan Sharks Project’ has secured more than 380 prosecutions for illegal money lending, leading to over 330 years’ worth of custodial sentences for loan sharks. They have written off over £74 million worth of illegal debt and helped over 28,000 people.
Some tips you can use to protect yourself from loan sharks
- Try saving money regularly
- Do not accepting cash loans
- Search the FCA to check if lender is legal
- If you need to borrow money, credit unions are a much safer alternative – visit findyourcreditunion.co.uk to find your nearest credit union.
- Encourage employers to research real time pay