Christmas can be a difficult time for many families as extra expenses start to pile up. This week, The Stop Loan Sharks project is warning people not to turn to loan sharks to solve Christmas money worries.
Loan sharks are illegal money lenders, and don’t work according to any official financial regulations. They can cause a lot of misery to people caught up with them. These criminal loan sharks often take benefit or bank cards as security, and resort to bullying and violence to get their money. Loan sharks can charge interest rates running into thousands of percent, making it impossible to repay the loan.
The important thing to remember if you’re involved with a loan shark is that you aren’t breaking the law, they are.
You can get help from the Illegal Money Lending support team on 0300 555 2222 or at stoploansharks.co.uk. Anything you say to them will be treated confidentially, and phone lines are open around the clock throughout the festive season.
It might not be obvious that someone is a loan shark – they can seem friendly, helpful, and can be popular in your community. To be safe, it’s best to avoid cash loans, even if it’s from someone you know.
If you need to borrow money, credit unions are a much safer alternative than borrowing from a loan shark, and are more responsible than payday loan services.
Credit unions work a lot like a bank or building society, but are run by and for their members. The profits are used to improve services and reward their members. They are regulated by the Financial Conduct Authority, and members’ savings are protected if the credit union fails.
All credit unions offer savings accounts and lend money at low rates of interest. Some even offer other services such as mortgages, funeral plans, current accounts, pre-paid debit cards, budgeting advice and help with debt management.
The whole point of a credit union is to help its members – not distant shareholders, so there is usually a more personal and understanding approach to saving and lending than you might get with a high street bank or payday lender.
I’ve been a member of the credit union based at Woodhouse Close Church and Community Centre since 2012, and when I was serving as Minister for credit unions in the last Labour Government, we put £86m into credit unions, helping them improve capital investment and modernise their systems.
Find a Credit Union Near You
NE First Credit Union have locations in Bishop Auckland, Shildon, Middleton-in-Teesdale and more.