Consumers urged not to 'get bitten' by loan sharks

05/11/2009

Consumers in Wales are being warned not to fall into the clutches of illegal loan sharks and turn to them as a quick source of finance.

Community Housing Cymru is urging social housing tenants to avoid loan sharks, many of whom charge exorbitant interest rates and have unsavoury methods of collection should a debtor fall behind with their payments.

The body has launched a media campaign to make sure those with debt problems'>debt problems are aware that turning to illegal loan sharks can lead to them falling further into debt and exacerbating their problems.

A series of television adverts have been made urging those in need of finance to turn to reputable lenders who abide by industry rules and regulations.

Debt solutions firm EuroDebt would recommend that people seek professional debt advice or money advice before committing to very expensive sources of finance like pay day loans or loan sharks.

We often find that because of the nature of the finance provided, often at the doorstep, that vulnerable people pay these companies or individuals ahead of priority payments like rent, mortgage, council tax or utilities.

We would look at non-borrowing solutions if the client is looking at tackling their debts. Some people need to budget more effectively, but for many a long-term managed solution may be required like a Debt Management Plan'>Debt Management Plan.

Households with low disposable income would probably not meet the criteria for an IVA and bankruptcy may be a consideration.

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