Debt management reaches new levels for loan shark victims
Debt management reaches new levels for loan shark victims
Friday 15th January 2010
New research released by housing association Circle Anglia reveals that around 100,000 low-income families will spend the next year burdened with a combined debt of £82 million, after borrowing from loan sharks to fund the cost of Christmas.
The report estimates that together people borrowed £29 million, but taking into account average interest rates of 825 per cent, the resulting figure is closer to £82 million.
A typical person took out nearly £300 from the illegal lenders to fund the festive season, and would end up paying nearly three times the initial amount.
The study also reports a 22 per cent increase in the number of people using loan sharks during the past three years.
Chief executive of operations at Circle Anglia Andy Doyland said: "These figures are very concerning and demonstrate the scale of illegal lending across the UK.
"We hope that by turning the spotlight on loan shark activity we can help more people to seek help and get sound financial advice."
A report by the New Local Government Network states that illegal lending is likely to grow where an alternative supply of sub-prime lending is not readily available, meaning people have little option but to borrow from disreputable sources.
The report suggests that local government is "well poised" to help reduce financial exclusion and the associated risks from loan sharking, through initiatives like mapping predatory lending, analysing local need, and enhancing enforcement against illegal lending.
News article brought to you by Debt1 - UK debt management specialists
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