Loan sharks on the prowl - warning 20.12.10
Residents have been warned that loan sharks will be baring their teeth this Christmas.
Unlicensed money lenders operate by illegally offering loans which can prove impossible to repay. They prey on victims at their most vulnerable and often use threats and violence against those who fall behind with their payments.
Staff at Sutton Council's trading standards team say some people are tempted to accept astronomical levels of interest in a bid to fund a Christmas to remember.
Cllr Simon Wales, Sutton Council's Executive Member for Communities, Transport and Voluntary Sector said: "All too often, the victims of illegal lenders say the reason for taking out the loan initially was to pay for Christmas.
"Illegal lenders prey on vulnerable people within communities, often those who would struggle to access mainstream credit.
"The sharks often trap people in a spiral of debt with extortionate rates of interest, and then resort to the most extreme methods to demand repayment."
Evidence shows loan sharks charge interest rates averaging a massive 825 per cent, meaning a family taking out a loan of £300 would face a repayment of more than £800.
The London Trading Standards' Illegal Money Lending Team (IMLT), backed by Sutton Council, advises that unauthorised loans are both illegal and unenforceable. The law is there to protect anyone who may be conned or pressured into borrowing money from sharks.
The team investigates and prosecutes any cases that are brought to them and also provides support and advice to the victims themselves.
Free advice is available 24 hours a day by calling 0300 555222, or 020 7364 6886.
The warning comes as a credit union, which encourages saving and deters loan sharks, is set to be established in Sutton.
The Financial Services Authority (FSA) has given permission for the Croydon Savers Credit Union to be expanded to both Sutton and Merton.
Credit union members – including small businesses - are encouraged to save a small amount of money every week or month to help them get into a routine of saving and become more financially secure.
Last updated: Thursday, 06 January 2011