Fears over debt as more people could turn to loan sharks to cover Christmas

• Nearly one in ten people turned to loan sharks to cover the costs of Christmas last year.
• More than half of victims turned to illegal money lenders in order to pay for essentials such as utilities, food and fuel in the first half of 2022.

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.

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.

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.

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.

“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:

1. If you're struggling to make ends meet and need cash fast, the thought of a loan shark might seem tempting, but remember these lenders are not your friends. Debt can quickly spiral out of control – it's important to think carefully before taking out a loan and consider other options.
2. Never send money or give credit card, online account details or copies of personal documents to anyone you don’t know or trust. This information is valuable so make sure you protect it from criminals who can use it to find and stalk you, harass you or threaten those you love.
3. If you’re thinking about borrowing money, it’s important to check that your lender is genuine. Loan sharks operate illegally without the correct permission from the Financial Conduct Authority (FCA). Do your research first and check the firm or person you're dealing with is listed on the Financial Services Register.
4. When exploitative loan sharks are preying on hardship, it’s vital for people to know there is an ethical, local, not-for-profit alternative available. Credit unions are a lifeline for many people, with their services helping members to save regularly, borrow responsibly and keep track of their finances. There are other community lenders who are mostly not for profit, and who reinvest any surpluses into serving vulnerable customers, which can be found on https://www.findingfinance.org.uk/
5. Getting trapped in a never-ending spiral of debt after borrowing from a loan shark can have devastating consequences, not only on your finances but also on most other aspects of your life, including your mental health, work and relationships with your family and friends. If you're worried about a friend or family member, or if you need help yourself, Stop Loan Sharks can offer confidential advice and support.

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.