OFT Warns Consumers About Loan Shark Debt

The Office Of Fair Trading has warned people about using loan sharks to fund their spending over the Christmas period. These illegal money lenders offer cash loans with extremely high rates of interest, which often leads to the original loan amount spiralling into an unmanageable level of debt.

The warning comes after research conducted by research organisation Policis, estimated that 80,000 new people will opt to take cash from a loan shark to cover the cost of Christmas.  Last year, it is estimated that illegal loan sharks lent £120m whilst receiving £450m back.

Along with extortionate rates of interest and intimidatory methods of collecting repayments, one of the main problems of borrowing from an illegal loan shark is that the traditional methods for dealing with unmanageable debt are not available to the borrower and police intervention is often required.

Consumer Affairs Minister, Ed Davey, backed local organisations and teams brought together to combat the problem “We're hoping that our success in helping the community will drive him to continue the program.”

To read the full article click here.