Mel B speaks of 'vicious' loan shark lending

26/10/2009

Mel B has told of her troubles with a new reality TV experiment - which saw the star living on a Leeds council estate and giving much of her income to a loan shark.

The former Spice Girl swapped her celebrity lifestyle to live in the shoes of a mum with five children who survived on a family budget of £264 per week.

Writing in the Daily Mail, Mel said that a big chunk of this income - £72 per week - went on a doorstep loan shark.

This is a common money problem facing low-income Brits who turn to unregulated sources of credit after being refused loans and cards on the high street.

Mel said that the loan shark payments were "another vicious situation" she had faced during her time on the Harehills estate.

"[Families] end up going to doorstep loan companies which give them emergency cash - but they charge an arm and a leg in interest," she added.

"Mel B's story probably reflects the circumstances of hundreds of thousands of households in the UK, where going bankrupt may seem the only option for those going financially backwards each week," EuroDebt director Kevin Still commented.

"People often prioritise loan shark and doorstep lender payments over rent council tax and utility payments, which may put the roof over their head at risk. Second quarter figures from The Insolvency Service showed 27.4 per cent rise in the number of individual insolvencies for the same quarter in 2008.

"There is a very real danger that short-term credit, including the likes of pay-day loans, become long-term credit lines that incur extortionate interest levels with heavy penalty clauses in the small print. We would recommend that anyone in this situation take professional advice."

Mel B conducted the experiment for an upcoming ITV show, entitled 7 Days on the Breadline.

Tags; Income Worries and Debt, Recent Graduate Debt, Young Family Finances, Retirement Money Problems, Credit Card Lifestyle,

Regional Debt Advice; Debt Advice Leeds,

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