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Loan sharks preying on vulnerable

PUBLISHED: 12:36 15 November 2008 | UPDATED: 21:48 05 July 2010

PREDATORY loan sharks are preying on vulnerable families struggling to cope with the financial pressures of Christmas in the tightening grip of the credit crunch, it has been warned.

PREDATORY loan sharks are preying on vulnerable families struggling to cope with the financial pressures of Christmas in the tightening grip of the credit crunch, it has been warned.

Reg Ruffles, assistant county trading standards officer for Suffolk, said they were “extremely concerned” that the current economic climate would encourage those feeling the pinch to turn to illegal lenders.

Soaring rates of interest - some as high as 117,000pc - are not uncommon while there is other evidence to suggest that more women are being coerced into sleeping with loan sharks to pay off excessive seasonal debts, he warned.

It comes in time for the start of National Consumer Week, which launches on Monday, and soon after the Citizens Advice Bureau (CAB) said they were overwhelmed with people seeking financial help.

As a result trading standards officials are stepping up their efforts to help people cope with mounting money worries in the run up to the festive period.

“Christmas is a very difficult time anyway but combined with the pressures of the credit crunch we're obviously worried that over the next few months it will become worse,” Mr Ruffles said.

“As a result we'll be increasing publicity and offering advice at a number of workshops throughout the county where people can come along and speak to a member of staff in confidence and gain money saving tips and information about budgeting for the festive season and beyond.

“We want to talk with people and see what the best way forward is and how we can help them.”

Mr Ruffles said there was a lot of anecdotal evidence to suggest the use of loan sharks is on the rise but it was often hard to secure a conviction.

“Only the other a day I was speaking to a girl who said a friend of hers recommended going to someone to borrow money off,” he said. “On another occasion I was speaking to some friends who said they knew of people going round door to door.

“So we know this stuff is going on but it can sometimes be difficult to get sufficient evidence to secure a conviction because people are reluctant to come forward.

“What people have to remember is if we do take a loan shark down then they won't have to pay back the money - hopefully that acts as an incentive.

“Many people think there is no alternative and if they need the money then they will go to loan sharks - there's no question about it. The trouble is it takes so long to pay off - interest rates of more than 100,000pc are not uncommon and people can still be paying it back a year later. It's a vicious cycle.”

Earlier this year Lowestoft and Great Yarmouth were chosen for an investigation by the Birmingham City Council-led illegal money lending unit because their relatively poor populations are ripe pickings for unscrupulous money lenders.

In the last four years the government funded team has shut down £7.5m worth of loan shark books and seized £285,000.

Mr Ruffles encouraged people who were facing financial hardship to use legitimate lenders such as the Ipswich and Suffolk Credit Union.

“It's a much better way and a lot safer alternative,” he said. “As well as the huge rates of interest loan sharks also use blackmail, violence and there is evidence of sexual offences as well. In comparison credit unions can offer interest rates as low as 2% - which for someone whose credit reference may be dubious at best is very good.”

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