“They call them loan sharks for a reason – they circle when you’re in trouble,” was Heart of the South West’s Trading Standard’s Manager’s warning on BBC Radio Devon this morning, (scroll to 7:05am).
Manager, Steve Gardiner, was talking to Radio Devon’s Michael Chequer about recent research that has identifies that people are borrowing money to pay for rising costs of living.
“With the rising costs of living, there is a danger of people turning to loan sharks for extra cash, and in other areas of the country, that has been quite a significant problem,” said Steve.
At first, an approach might sound like an offer of help to tie you over, Steve explained, “but later on, the high interest rates and intimidation really lock you into a circle of debt,” he told Radio Devon.
“Some of the interest rates they charge, in terms of our normal Annual Percentage Rate (APR) can be absolutely extraordinary – over a thousand per percent APR – and that’s way above what a commercial operation would offer.
“A typical way of spotting them, is that they don’t have documentation. Anyone who offers, or brokers credit, has to be registered with the Financial Conduct Authority, so that’s what you need to look for.”
Asked what the options are for people who are struggling with money right now, he said:
“Banks and building societies are available to most people to borrow money from. But if you can’t do that, there are Credit Unions, which are not for profit organisations run on a cooperative basis, that can lend to people.”
This week is national ‘Talk Money Week’. It’s a week designed to encourage people to talk to trusted others about money and finances. Research shows that people who talk about money, among other things, feel less stressed or anxious and more in control.
England’s Illegal Money Lending Team are a national organisation that investigate and prosecute illegal money lenders. They have trained advisors for the public to speak to.
Asked by Radio Devon what people should do if they find themselves already in debt to a loan shark, Steve Gardiner’s advice is:
“Talking about it is one of the key issues in this situation. People are often very reluctant to talk about their financial predicament, but the Illegal Money Lending Team have hotlines and a website with trained advisors who can talk with people about their financial situation and can help them through what can be a real financial crisis.”