Residents are being warned not to turn to predatory loan sharks to solve Christmas money worries.
The Stop Loan Sharks project has launched a national campaign to raise awareness of the risks posed by illegal money lenders and provide guidance on where help can be found.
Loan sharks do not operate under official financial regulations and can cause extreme misery to those who choose to use them.
Any person lending money should have a consumer credit licence from the Financial Conduct Authority (FCA). Licensed lenders have to comply with legal obligations in dealing with consumers, including the use of official paperwork and fair collection methods.
Loan sharks operate illegally without the correct permissions from the FCA. These criminals often take benefit or bank cards as security and resort to intimidation and violence if victims default.
Loan sharks can charge interest rates running to thousands of per cent, making it impossible for borrowers to repay the loan.
Tips to protecting yourself against Loan Sharks this Christmas:
- Save money regularly, so you are not in urgent need of a loan
- Do not accept cash loans, even if the lender seems friendly or helpful
- Search the FCA Financial Services register to check the lender is legal
If you need to borrow money, credit unions are a safer alternative than borrowing from a loan shark. Find out more about Fusion Credit Union here.
If you have been the victim of a loan shark, you can contact the Illegal Money Lending Team in confidence on 0300 555 2222 or visit the Stop Loan Sharks website. Their lines are open around the clock throughout the festive season.