People who are struggling financially during the COVID pandemic are being encouraged to be wary of loan sharks.
At first loan sharks might seem friendly, but borrowing from them is never a good idea – even if you feel you have no other options.
Loan sharks are unregulated. They often give cash loans without any paperwork, charge high interest rates making loans difficult or impossible to pay back and turn intimidating or violent with people who cannot pay.
Cllr. Janette Williamson, Leader of Wirral Council, said: “Loan sharks prey on desperate people who may not qualify for traditional loans. It can lead to a spiral of debt where another loan is taken out to repay the last one which can end up destroying people’s lives.
“There are lots of alternatives and the Money Advice Service is a good place to start if you’re struggling financially.”
If you’re struggling to pay your bills, there are specific things you can do to sort out your finances. You may be entitled to benefits and you can check this on the government’s website.
Citizens Advice also offers guidance on debt solutions and budgeting tips.
Signs to look out for if you suspect somebody to be a loan shark:
- Giving you no paperwork or agreement on a loan
- Refusing to give you information about the loan
- Keeping items until the debt is paid, such as your mobile phone or cash card
- Taking things from you if you don't pay on time
- Adding more interest or charges so the debt never goes down
- Using intimidation or violence if you don't pay
The Financial Conduct Authority (FCA) keeps details of all authorised lenders. If a lender isn’t listed as having a current authorisation to lend money, don’t borrow money from them and don’t let them come into your home.
Cllr. Williamson added: “Although some loan sharks resort to intimidation and even violence, they are not beyond the law. Any lender – authorised or not – who harasses you is breaking the law. If something feels off, walk away and contact Citizens Advice or call the Money Advice Service on 0800 138 7777 for help.”
If you or someone you know is a victim of illegal money lending, contact Stop Loan Sharks for support on 0300 555 2222 or visit www.stoploansharks.co.uk.