BORROW £500, pay back £20,000. Doesn’t sound like a very good deal, does it? But that’s exactly what one hapless person had to stump up after agreeing to take money from a loan shark.
These unlicensed money lenders operate outside the law. And if you borrow from them you are likely to get a loan on bad terms, pay extortionate rates of interest and if you can’t pay you’ll probably be harassed and intimidated into borrowing more.
Wigan Council cabinet member Terry Halliwell says: “We all sometimes end up borrowing far more than we ever meant to but however tight money gets please do not be tempted by the promise of quick money from a loan shark. It will only make matters worse.”
In the case mentioned above, the loan shark charged his victims a staggering 8,000 per cent interest!
He confiscated the benefit books of disabled and vulnerable people who could not re-pay and threatened to ‘send the lads round’ to his terrified ‘clients’.
The council’s chief trading standards officer Julie Middlehurst says: “We are doing all we can to try and net these sharks but it is up to individuals to say no to them. Remember, if you have borrowed money from a loan shark you are under no legal obligation to repay the debt.”
Credit Unions may be a more reasonable solution to your problems and Wigan has two: Unify Credit Union based in Ince and Welcome Credit Union based at the council tax offices in Whelley.
Both are savings and loans co-operatives which can be accessed by anyone who lives or works in the borough of Wigan.
By saving with them, members build up a credit history and can then go on to benefit from low cost loans.
Credit unions consider each loan on an individual basis even if you are on a low income or have a poor credit history.
For further information on Unify you can call 01942 701706, or visit Unify you (external link)
For more information about Welcome Credit Union you can call 01942 828702 or visit Welcome Credit Union (external link)
l If you are having problems with loan sharks or would like to report an unlicensed money lender, call Consumer Direct on 08454 04 05 06 (calls charged at local rate).
Door is open for advice
Last year, Citizens Advice Bureau advisors in Wigan and Leigh dealt with cases involving nearly £20m of personal debt. And staff admit that this colossal amount could very well be the tip of the iceberg.
CAB debt specialist Paul Byron gives advice to a client
“Debt is the biggest single area we deal with,” says CAB debt specialist Paul Byron. “Over the last few years it has been really easy to get credit and a lot of young people have been enticed into getting credit cards.”
The Open Door team of trained voluntary advisors, working alongside paid staff, know when they are faced with someone who is struggling under the weight of personal debt.
“One tell-tale sign is when the client turns up with a carrier bag full of unopened letters,” says Paul. “People are often unwilling to face up to the amount they owe so the final demands and threatening letters are ignored.
“When they come to us they have begun to accept that they do have a problem with debt and have decided to do something about it.”
Paul and the team helped to write off £2.4m worth of debt for their clients last year and by working with creditors they managed to negotiate affordable repayments on many millions more.
Paul also operates a helpdesk at the county courts on mortgage and rent repossession days and his advice to those facing hardship is clear. “Seek help. While you may have to spend a little time in the waiting room, it could be well worth it.
“Going further into debt to try and get out of debt is seldom going to work and we will normally be able to suggest viable alternatives. If you need assistance planning a budget, we can help.”
The CAB offices in Wigan and Leigh and getting busier and busier. On arrival, everyone has an initial interview to decide how complex their case is. If a client needs a full interview they are asked to wait – possibly for some time depending on the number of advisors available.
Don’t sink in debt
IF you are struggling during the current financial climate you are not on your own. But the advice is: don’t ignore the problem – unless you take action it will only get worse.
There is a lot of help and support available, and if you are affected by the credit crunch here are some key contacts.
- Personal debt: Wigan Borough Citizens’ Advice Bureau – 08448 269713.
- Personal loans: Unify Credit Union – 01942 701706 or Welcome Credit Union – 01942 828702.
- Housing and homelessness: Wigan and Leigh Housing – 01942 705040 and Housing Options advice centre – 01942 487717.
- Independent advice on benefits: Wigan Independent Advice Centre – 01942 324851. Age Concern – 01942 241972 (Wigan) or 01942 607337 (Leigh). Wigan Borough Citizens Advice Bureau – 08448 269713.
- Council Tax: Wigan Council –01942 828696.
- Housing Benefit and Council Tax Benefit: Wigan Council – 01942 828644.
- Free school meals: Wigan Council – 01942 828609.
- Employment and business support: Wigan Council learning, employment, advice and guidance service – 01942 404456/776793.
- Fuel: Energy Saving Trust advice centre – 0800 512 012.
