“Heartless predators” are targeting people in “unexpected” areas as the cost of living crisis begins to bite, a charity warned.
As Sefton Council warns the current climate is putting more people at risk from loan sharks, one local charity said the problem is spreading out all over the borough.
Jane Groves, organisational and development manager of Citizens Advice Sefton, told the ECHO that people have been in touch with her service about loan sharks operating in affluent parts of the borough, including Formby and Southport as well in the more deprived areas in the south like Bootle.
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Jane said: “There’s no pattern that we’re seeing in terms of where they are. They are operating in communities throughout Sefton” adding that there is often an “unhelpful stereotype” about those most likely to be affected by illegal money lenders.
She said: “People assume there are loan sharks only in disadvantaged areas but that’s not true because we hear of other loan sharks that are up in the north, places like Formby and Southport.
“And, it’s not just people on benefits, it’s people working, it’s people who own their own homes. When you look at mortgage rates, interest rates going up, issues around cost of living is affecting everyone.”
People also may not always realise they are falling prey to loan sharks until it is too late.
Jane said: “They are known as loan sharks, what they are is illegal money lenders, often we see it is with cash loans, usually no paperwork and charging huge amounts of interest.
“These lenders might take people’s bank cards, their passports, even their watches as security for loans and they will tend to keep coming back for money, even if the original debt has been paid back.”
Loan sharks can be individuals well known in an area and will often use social media, including local Facebook groups, to tout for business.
Jane said: “They will tend to be someone everyone knows, a member of someone’s own community.
“People might even think of them as a friend or maybe they’ll see them as someone people are a little bit scared of. Sometimes, it’s someone they know and maybe even trust, and they’re like, ah look I’ll just lend you 500 quid, it’s fine.
“But if it’s not family and there’s no paperwork, there’s red flags there, it’s not fine. A loan shark is never the solution. People can end up being threatened, having their family threatened, and the loan shark keeps coming back for more and more.”
With fears the cost of living crisis could be leaving more and more people struggling to deal with spiralling costs, Jane said she would urge people facing financial difficulty to consider credit unions, the local Citizens Advice and check any money lenders with the Financial Conduct Authority.
People affected by loan sharks can report illegal money laundering in confidence through the Illegal Money Lending Team at www.stoploansharks.co.uk.
Jane said: “We want people to know that is their choice, they don’t have to report it, they can still come to us for help either way, but if they do want to report it, we’re also here to help with that.”
Sefton Council’s cabinet member for communities and housing Cllr Trish Hardy said: “Sadly, loan sharks step up their activities at times like this and target the most vulnerable.
“To people struggling with the current cost of surviving crisis they can look like a way out, but it is only a very temporary solution.
“However, anyone taking out a loan with one of these heartless predators nearly always ends up in a much worse situation owing many times what they initially borrowed and potentially facing threats of violence to them and their family.”
“I would urge anyone struggling to visit www.sefton.gov.uk/cost-of-living or www.sefton.gov.uk/seftonsupporthub or to phone our Contact Centre on 0345 140 0845.”
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