Christmas sees surge in illegal lending
The number of households in Britain borrowing money from loan sharks has risen from 165,000 in 2006 to 200,000 in 2009.
A study has estimated that 50 per cent of the money borrowed from these illegal lenders is used to cover the cost of Christmas.
Circle Anglia, the housing organisation that commissioned this research from the Financial Inclusion Centre think tank, says that, at £29 million, the amount of money borrowed by UK households over the Christmas period in 2009 was unprecedented for a generation.
Faisel Rahman, managing director of ethical lender Fair Finance, said: ‘Millions of pounds are being taken out of the pockets of the poor by illegal and extortionate lenders every year. As the credit crunch continues, more people are being left behind by mainstream financial services.’
Circle Anglia is keen to raise awareness among deprived households that they have other options and need not turn to loan sharks.
Andy Doylend, executive director of operations, said: ‘The challenge in 2010, for all of us in the housing sector, is to make sure that we reach out to our residents to make them aware of the availability and accessibility of affordable finance and to help them manage their finances better.’
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Readers' comments (8)
AC Preston | 18/01/2010 9:28 am
Where have they got these figures from? Do these illegal lenders report to some illegal lending regulator?!?
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Melvin Bone | 18/01/2010 10:07 am
Its does seem as if these figures have been plucked out of the air...
Maybe loan sharks have to report to the FSA now?
Hardly a surpirse than more money was lent out at Christmas though...
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kass | 18/01/2010 1:06 pm
Christmas is certainly an evil in irrepsonsible pushing consumerism to the extreme. Of course the poor pay the price of this because they find themselves forced in the spending frenzy about things they cannot afford.
For once Circle Anglia is saying the right thing. Now I am waiting to see whether they will follow this up in practice.
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Steve | 18/01/2010 1:56 pm
Are Circle Anglia or their researchers aware that sensible savings and responsible lending can take place within a Credit Union.
Is this being promoted as mutual local banking?
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Troll | 18/01/2010 2:09 pm
Haha, kass is even arguing against Christmas now!
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Peter | 18/01/2010 2:10 pm
I have heard a lot about these loan sharks but nobody can tell me who they are and where do they advertise themselves? Most of the people (tenants) I have come across have huge debts mostly with credit cards.
I am very sceptical with the information in this article.
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karen | 19/01/2010 8:19 am
Kass no one is "forced" into spending money at Christmas. You aren't taken at gunpoint to a shop and made to spend money. It is a choice thing.
I know you like to blame everyone else for everything that happens but spending money you don't have isn't anyone elses responsibility but "yours".
I agree with the scepticism about the validity of these figures. I would say though that we know there is an issue with borrowing money from opportunistic lenders charging insane APRs which is why a lot of HA's have links to a credit union and advertise their services as much as possible. In addition a lot of HAs have financial inclusion officers to provide advice. The main problem that most people (irrespective of home status) have is that they hide the problem from themselves as much as anyone else.
No its not ideal - we live in a credit age where credit cards are too easy to get and its easy to spend money we don't have. Education from a young level is imperitive for everyone.
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The ONLY One | 20/01/2010 3:01 pm
Kass - People CAN be responsible for thier own actions, as Karen states. I also look forward to seeing the rent arrears figures increase sharply over the Xmas period as some residents use thier rent payment as an interest free loan for fags and booze!!
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