Loan sharks are reportedly taking advantage of the rising cost of living to target families on low incomes.
Halton Borough, including Widnes and Runcorn, is reportedly seeing a rise in unlicensed moneylenders charging unattainable interest rates. As reports of illegal traders making unsolicited door knocks increase, people living in Halton have been urged to stop them in their tracks.
Councillor Marie Wright, chair of Halton Council’s health and wellbeing board, told CheshireLive that loan sharks have long been an issue in the borough. However, as the financial crisis worsens, there are increased concerns about the safety of residents.
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Cllr Wright said: “We have had problems in the past with loan sharks in Halton. Now people have reported that they are going round knocking on doors and asking if they want to borrow money.
“We have got loan sharks coming up now as an agenda item at our meetings. We are trying to educate people about them.
“Children are going to be going back to school soon and families will need to be buying new uniforms too. It’s just never ending.
“If you go down the loan shark route there’s no way out. The problem is if someone knocks on your door and offers you a thousand pounds, you’re going to say yes.”
The term "loan sharks" refers to lenders who are not authorised by the Financial Conduct Authority (FCA). They typically tend to give out loans easily to customers, before charging them extortionate interest rates, which they are often unable to pay back.
The illegal lenders then often turn to violent or threatening behaviour to retrieve the money ‘owed’ to them and have in some cases, forced victims into drug-dealing or prostitution to pay off their debt.
Cllr Wright said that Halton Council is currently working with Halton Credit Union and the local Citizens’ Advice Bureau to educate people on the perils of becoming involved with loan sharks.
She added: "People need to know what happens when you go down that road. We are trying to educate about planning and the credit union.”
The issue, which has been highlighted as particularly concerning in Halton, has reportedly been slowly on the rise in parts of the UK for the past couple of years due to covid lockdowns and the ensuing cost of living crisis.
As food and fuel bills have seen a sharp increase since the beginning of 2022, energy bills have increased by more than 50 per cent and are expected to shoot up another 65 per cent in October.
The sudden rise in household bills is seeing more and more families struggle to keep up with the most essential of payments, with new figures from Legal and General’s Rebuilding Britain Index showing that 49 per cent of Cheshire households are concerned over missing rent or mortgage payments. A further 13 per cent have reported that there is ‘nothing else to cut back on’, putting them at their budget limits.
Katherine Hart, lead officer for the Chartered Trading Standards Institute, told CheshireLive : “At this time, the crisis is forcing a lot of people into debt, causing them to panic. A lot are not able to get the ready finances and loans that they could before so people are cutting corners and one of those is the desperation of getting instant cash and going to someone they think can help them and give them a quick fix.
“It is never a quick fix. What you think is say a £1,000 loan can very very quickly be a £6,000 loan. Then you are under the control of an illegal money lender who will do anything in their power to keep you under their control.
“We have seen an increase (in loan sharks) in the past few years because of the cost of living and covid, which is causing people to have financial worries that they haven’t had before.”
In a bid to curb the sinister lenders, people are being urged not to take loans from those who have not been regulated by the FCA and to turn away anyone offering them money at their doorstep.
To report a loan shark, contact the Illegal Money Lending Hotline on 0300 555 2222, email reportaloanshark@stoploansharks.gov.uk or text ‘loan shark’ and your message to 60003.
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