Housing associations have reported that loan sharks are causing debt management problems for some of their poorest and most vulnerable tenants.
Community Housing Cymru (CHC), which represents housing associations in Wales, is launching a specific campaign to raise awareness with their tenants and warn them about borrowing money from potentially violent and intimidating lenders.
Loan sharks target the association’s tenants as they are moving into their properties, and offer them assistance to be able to buy new washing machines, fridges and freezers. However the lenders then make it virtually impossible to repay the loan by charging interest rates of over a thousand per cent, threatening the debt management of many borrowers.
Nick Bennett, chief executive of CHC, said: “Tenants have been threatened, intimidated, some have even considered suicide because of the impact that these loan sharks have had in charging exorbitant rates and then demanding the money back.”
“There’s certainly evidence that loan sharks do target our tenants.”
He estimates that approximately 15,000 people each year use loan sharks to borrow money, while another 150,000 borrowed money from doorstep lenders, who charged interest of up to 200%.
People who are struggling to keep up with their debt repayments will often pay the ones who “shout the loudest”, ignoring debts of a higher priority, such as mortgages or secured loans.
The threats and intimidation used by loan sharks can often be extremely stressful and embarassing, as many use these as a way to extort money – which only causes debt problems in other areas as mortgages etc go unpaid.
By using a reputable debt management company, like Chiltern, debts are prioritised and budgeted for accordingly – making finances simpler as only one payment is needed each month to cover all unsecured debts.
What’s more, contact with all unsecured creditors – including doorstep lenders – are dealt with on the client’s behalf, with interest and charges negotiated to try and have them reduced or stopped.
