Almost 200,000 Britons are already trapped by the loan sharks. Further more, an estimated number of 35,000 people can fall prey to the loan sharks or illegal lenders this year as a result of the turbulent economic situation. The most affected segment of this recession is the low or no income group.
The number of people borrowing from the loan sharks has already reached an alarming level. To fight this situation the New Local Government Network or the NLGN has decided to pump in more funds into the Credit Unions and set up Council banks. This would facilitate refused borrowers with loans.
Who can be the easiest prey for the loan sharks?
Loan sharks prey on people who are financially helpless. Illegal lending is prevalent in places where standard or sub prime lending is not available. Situation can be worse for people who do not have the facility or eligibility to obtain loans from credit unions or home credit companies.
A large number of people living in the home credit excluded areas become an easy victim to the loan sharks. These people generally have very bad or no credit history at all. They also have a very low income with no assets and succumb to the easy and instant cash that the loan sharks offer.
Another financially vulnerable section includes people who have a chaotic lifestyle or suffering from mental illness or drug and alcohol addict. They are easy targets for loan sharks. Most of these borrowers have used home credit lenders in the past. However they ultimately had to turn to loan sharks since they defaulted in paying the home credit companies and got turned down by all other regulated sectors.
What are Local Governments doing to fight against loan sharks?
- Pointing out illegal money lenders and analysing local requirements
- Developing and promoting Public Awareness through financial literacy
- Taking enforcement actions against the loan sharks
- Actively developing and supporting credit unions and sub prime lending
- Direct intervention in proactive Council banking and availability of credits
- Identifying the financial exclusions
- Asking the councils to convince banks to lend affordable loans to the locals
What we can do against loan sharks?
You will be amazed to find out that a large section of people are quite unaware of the dire consequences of falling into the trap loan sharks? Some of them even consider loan sharks to be angels. They do not know what to do when they are brutally abused by loan sharks. They also do not know that loan sharking is illegal. They do not know about the government initiatives. And perhaps they are not reading this article now.
We must take the initiative. The best thing we can do is to educate them – tell them why they should stay away from the loan sharks. And more importantly, help them to find out alternatives. If you can stop even one person from being trapped by loan sharks, you should be proud of being a worthy human being. Here you are not saving a person – perhaps you are saving a family.
If you come across a loan shark report it straight to “Stop Loan Sharks” in any of the following methods:
- Website: http://www.direct.gov.uk/stoploansharks
- 24×7 helpline: 0300 555 2222
- Email: reportaloanshark@stoploansharks.gov.uk
- Text/SMS to 60003
