A housing association has launched a campaign to combat loan sharks who charge up to 3,000 per cent interest.
Cartrefi Conwy say that vulnerable tenants can fall prey to unscrupulous money lenders.
Their plight was highlighted at a conference at the Glasdir centre, in Llanrwst.
The event was organised by Shelter Cymru and sponsored by Cartrefi Conwy.
The conference heard that many people are struggling to pay off Christmas debts.
As a result loan sharks ar circling, ready to pounce and plunge tenants into ever-increasing levels of debt.
In one case, a money lender was charging 3,000 per cent interest.
Cartrefi Conwy Operations Director Gwynne Jones is aware some tenants had fallen into debt and were now in danger of falling seriously behind with rent payments.
He said: “Unfortunately we increasingly find that some tenants pay for Christmas by excessive borrowing on credit cards and bank loans. The problem then is what these tenants do when that credit is no longer available.
“High levels of personal debt are a major concern and I think we can expect to see even more people fall into debt as changes to the benefit system means some tenants will have even less income available to buy food, pay domestic fuel bills and their rents.
“It is then that loan sharks can move in to prey on these vulnerable people. And of course, once they agree to a loan the interest rates charged are so extortionate they are often repaying the loan for years.
“We have been aware of this problem for some time and we already do a great deal to highlight the pitfalls of borrowing money from loan sharks and in signposting tenants to secure and safe organisations in applying for bank accounts, insurance and sources of credit.”
He added: “I’m delighted Cartrefi Conwy has sponsored this Shelter Cymru conference which is looking at a number of issues from loan sharks to the changes in housing benefit.
“It is important we, at Cartrefi Conwy, work with our tenants and other agencies to work out how we can best help. It is vital tenants have the right information and know where to get help should they need it.
“I’m also determined that we will not allow loan sharks and illegal money lenders to prey on our tenants. And we will bite back should loan sharks move onto any of our estates.”
Ryan Evans, Client Liaison Officer from the Wales Illegal Money Lending Unit, told delegates it was vital they learn how to identify the signs of illegal money lending and help the Unit tackle the growing problem within communities.
He said: “The term loan shark applies to anyone who is lending money without having a license which is a requirement of the Consumer Credit Act 1974. Licenses are only issued to individuals or companies whom are judged to be fit and proper people.
“It is estimated as many as 200,000 UK households use loan sharks with most living in deprived areas.
“Research shows that victims are most likely female, aged 30-40, living on welfare benefits and in social housing. However, there is a trend emerging of self-employed people turning to loan sharks as they are unable to get credit elsewhere.
“Our research also shows that most of those who used loan sharks, 90%, had found it impossible to raise the £200-£300 they needed for an emergency. Most loans are needed urgently because of a distressful situation while as much as a quarter of the loans were for everyday expenses and a quarter to pay for Christmas.
“The problem is once a loan is taken out with a loan shark it is very difficult to pay it back as the interest charged is so excessive and the ‘penalties’
imposed for any missed payments can be huge.
“Vulnerable people are left in a situation of falling further and further into debt and facing threats of violence and intimidation from the loan sharks who lent them the money in the first place.”
However, Ryan Evans outlined to delegates the success the Wales Illegal Money Lending Team had enjoyed.
He said: “More than 2,000 illegal lenders have been identified and more than 525 have been arrested. We have managed to write off more than £38m of illegal debt and helped more than 18,000 victims.
“And we have seized and confiscated £1.3m in cash sending offenders to prison having secured prison sentences of over 128 years. Remember, loan shark debts are not enforceable and by taking action against loan sharks we can, in the long term, reduce rent arrears, evictions and homelessness.”
He added: “I would encourage any victim of a loan shark to call our dedicated hot line number and pass on any information they have, anonymously if necessary.
“It is also important to raise awareness of the Stop Loan Sharks Project in communities. Together we can put loan sharks out of business.”
Shelter Cymru National Operations Manager, Janet Loudon, says tenants and vulnerable people needed protection for loan sharks.
She said: “It is encouraging that the Wales Illegal Money Lending Team are successfully tracking down and prosecuting illegal money lenders despite the activities of loan sharks being notoriously well hidden.
“The quality of life of many victims is poor and they are trapped in a payment cycle, both illegal and legal, from which there appears no escape. Many are desperate for help but feel unable to shout out with fear and reprisal top of the list of why they don’t come forward.”
She added: “We have to work together and ensure tenants and illegal money lending victims can see past the intimidation and threats of those the loan sharks and get the help and advice they need.”
Cartrefi Conwy tenants wanting advice should contact them by ringing 01492 805625 or emailing lisa.jones@cartreficonwy.org The Wales Illegal Money Lending Team can be contacted on 02920 871093. If you have information about a loan shark operating in your community call the Hotline on 0300 123 33 11.
