OFT warning against borrowing from loan sharks
The Office of Fair Trading together with trading standards officers is starting a campaign against loan sharks, warning of the dangers of borrowing money from unregulated and illegal sources.
Around 200,000 leaflets and posters will be handed out and displayed in Scotland, Northern England and the West Midlands warning of the sometimes violent nature of loan sharks. An estimated 165,000 households in the UK borrow money from loan sharks.
The OFT commented: “Unlicensed loan sharks will often offer cash loans without paperwork; they may take benefit or bank cards as security, and threaten or use violence to get money.”
11,500 people and £31 Million of illegal loans have already been written off because of the OFT’s work to date. Prison sentences have been handed out to some of the illegal money lenders.
Craig Gedey, marketing manager at the Debt Advisory Line said: “The OFT’s work in this area of illegal lending is highly commendable and this new campaign will hopefully continue to highlight the fact that people should never borrow money from an unlicensed source.”
“With no contractual security and extortionate interest rates being charged, most people are very likely to fall behind with repayments to a loan shark.”
The OFT leaflet and poster campaign will highlight the extortionate interest rates charged and that borrowers will often face the possibility of threats and violence.
Craig Gedey continued: “People struggling with debts should seek professional advice from an established debt management company. Borrowing to repay other debts is a recipe for financial trouble; a good debt management company should complete an income and expenditure exercise to find out how much you can realistically afford to repay.”
“Here at the Debt Advisory Line, we are fully committed to your financial well being. We will be efficient, ethical and transparent in dealing with you and your creditors. Debt Advisory Line is a member of the Debt Resolution Forum and DEMSA and abides by the Office of Fair Trading Guidelines when giving advice to customers about debt.”