We need to talk about loan sharks – Northamptonshire credit union issues stark warning

Member News

With as many as three million people turning to an illegal money lender in the past three years, Northamptonshire based credit union Commsave has pledged its support and advice to families battling the cost of living crisis.

Research from not-for-profit organisation Fair4All Finance found that seven per cent of 18 to 75-year-olds said they or someone in their household had borrowed from an unlicensed or unauthorised informal money lender who charges interest – also known as a loan shark.

James Richards, Business Development Manager, Commsave, said: “The statistics are shocking. Loan sharks are exploiting the cost of living crisis to target struggling families and it’s important to know that this isn’t just something that happens on low income estates – it is increasingly common in workplaces and often comes in the form of befriending.

“A loan shark will often present themselves as friendly and trustworthy, but threats of physical harm are made when the victim struggles to maintain repayments and interest charges often run to four or five figures – with additional charges added on for missed repayments.

“It’s estimated that more than one million people in the UK are in debt to illegal money lenders and many feel too ashamed, embarrassed, or frightened to do anything. We need to be more open about this, support each other, and be aware of the threats and signs.”

Commsave, a UK wide organisation with its headquarters in Northampton, is urging people to be vigilant and steer clear of unregulated lending.

There are various things we can look out for to help us understand if someone may be a victim of illegal money lending:

• Declining health and wellbeing

• Difficulty managing finances – including late rent payments

• Becoming withdrawn

• Mention of a new friend

• Not being able to provide financial documents

• Reluctance to discuss financial situation

• Someone else being with them where money is concerned

• Receiving an unusual amount of mail or telephone calls.

Commsave is urging people to report loan sharks.

The England Illegal Money Lending Team (IMLT) work to “identify, investigate, and prosecute illegal money lenders, commonly known as loan sharks”. They have a team of specialist investigators and Liaise Officers who work to bring prosecutions and support those who have used loan sharks.

Anyone can safely report a loan shark by calling their dedicated number – 0300 555 2222.

As reported this week [28 June 2023] on financial website ‘This is Money.co.uk’:

“One option for people struggling to borrow money legally to consider is a credit union. These organisations are often able to lend money to customers on more favourable terms than other high street lenders, and have schemes in place to assist more vulnerable borrowers who may struggle to access credit elsewhere.”

Commsave is one of the largest and most successful credit unions in the UK, and anyone living in Northamptonshire is eligible to become a member.

James added: “People tend to go to loan sharks when they come up against some kind of domestic emergency and need to access a few hundred pounds quickly. One in five working aged adults in the UK have no savings and banks typically want to lend thousands so many people have limited options for getting their hands on the money they need. That’s why credit unions are so helpful. We exist to provide personal loans from as little as £100.”

If you are not yet a Commsave Credit Union member you can join here: www.commsave.co.uk