Experts have warned that unscrupulous lenders could try to cash in on the festive period as households struggle to cope with rising food, fuel and energy bills. Loan sharks are targeting vulnerable people seeking credit and trapping them into a cycle of debt with exorbitant interest rates and threats of violence.
A report published by the Centre for Social Justice estimated that 1.08 million people could already be in debt to an illegal money lender. This is over 700,000 more people than the most recent official estimate.
Figures released by the England Illegal Money Lending Team (IMLT) show that nearly one in ten of those who borrowed money from loan sharks last year did so to cover the costs of Christmas.
More than half of victims (52%) supported by the IMLT in the first half of 2022 had borrowed from a loan shark to pay for essentials such as food and fuel.
Loan sharks pose a dangerous threat to all communities. They charge exorbitant interest rates and target the most vulnerable with aggressive and exploitative practices. The impact of illegal money lending is severe and far-reaching, with devastating consequences for the mental health and wellbeing of those affected.
The figures come amid national warnings that the scale of household debt will continue to rise as financial pressures on households leaves many struggling to afford their monthly bills. The IMLT is working hard to combat the growth in illegal lending by focusing on prevention, awareness and enforcement activities.
A new social media campaign, #SleighNoToLoanSharks, is being launched to alert people about the dangers of using loan sharks and help prevent them from falling into their traps in the run up to Christmas.
Tony Quigley, Head of the England Illegal Money Lending Team, said:
“Loan sharks are doing untold damage in local communities, and we must do all we can to stop them. With their ruthless tactics, these predators are threatening vulnerable families, driving them deeper into debt, and pulling entire communities into an endless cycle of despair.
“At a time when families are under extreme cost pressures with mounting living costs, we are deeply concerned that those who are already struggling to make ends meet could be targeted by these predatory lenders.
“Our campaign aims to break this cycle by helping people understand the risks of loan sharks, what they can do if they feel threatened and where they can turn for help and support.
“The Stop Loan Sharks 24/7 Helpline offers confidential advice and support to anyone affected by illegal money lending. We know how stressful and frightening this experience can be. We can give you support on how to deal with this problem and help find a way forward.”
Follow these safety tips to protect yourself and loved ones from loan sharks:
Are you worried about a friend or family member who is being taken advantage of by a loan shark? Contact the Stop Loan Sharks 24/7 Helpline on 0300 555 2222 for support or visit www.stoploansharks.co.uk. Live Chat is available on the website between 9am and 5pm, Monday to Friday.