- Posted by: Joyce Watson MS
- Category: Feature
Local AM Joyce Watson has warned Mid & West Wales residents to beware of loan sharks during the winter holiday period.
The winter holiday is a key period for illegal money lenders to exploit families by lending that extra bit of cash, then charging an extortionate rate of interest.
The additional costs of gifts and celebrations, combined with sharp increases in the cost of food, fuel and utilities, will leave many families tempted to find extra funds, yet the wrong choice could have long and painful consequences.
Joyce Watson AM said: “Loan sharks are dangerous people who prey on the most vulnerable members of the public. In this period they know that some people will be desperate for money with extra bills and presents to pay for.
“I urge any victim or friend or family member of a loan shark to call the Wales Illegal Money Lending Unit’s 24 hour helpline on 0300 123 3311.
“Borrowing even a small amount of money could mean paying back many times as much in interest. Victims often find they are unable to repay and can face threats of violence.”
Mrs Watson advised: “If you are struggling for financial help, then credit unions offer a safe and easy place to turn to.
“Local credit unions provide savings accounts, personal loans and other basic financial products that can save money. Credit Unions offer a safe and affordable alternative to the activities of high cost lenders and illegal loan sharks.
“I am a member of several credit unions, and I can recommend them. I am pleased that our Welsh Government has supported them so strongly.”
Joyce Watson AM is also supporting the Co-operative Party’s campaign calling on the UK Government to regulate the growth of ‘payday loan’ companies, and to cap the cost of credit.
“As a Co-operative Party member, I have been shocked by the rapid growth and aggressive marketing of very high interest loan companies offering payday loans to meet monthly bills.
“Between April and May this year the number of people applying for a payday loan increased by a massive 58%. Yet a Wonga.com loan today comes with an annual interest rate of 2,674%. I would urge anyone who is tempted to think again and consider joining a credit union.”
If you are worried about money and would like advice, get in touch with the Money Advice Service (0300 500 5000) or the Citizens Advice Bureau (0844 477 2020).
A personal unsecured loan from a high cost lender of £500 paying back £17.50 for 52 weeks would cost £910, while the same loan from a credit union would cost about £10.83 each week, paying back a total of £563.16, a saving of more than £340.
A recent PricewaterhouseCoopers report showed 64% of people frequently struggle to have enough cash to make it to every pay day.
For further details about Joyce Watson’s work or to contact her please click on www.joycewatson.co.uk.
• SAVEeasy Credit Union Ltd, Llanelli: T 01554 770867, Email: [email protected], www.saveeasyhaverfordwest.co.uk/
• Loans and Savings Abertawe (LASA) Ltd, Swansea: T 01792 643632, Email: [email protected], http://www.lasacreditunion.org.uk/
• North Wales Credit Union: T 01492 580028, Email: [email protected], www.northwalescu.co.uk/
• Credcer Credit Union Ltd, Cardigan: T 01239 621408, Email: [email protected], http://credcer.co.uk/
• SAVEeasy Credit Union Ltd, Haverfordwest: T 01554 770867, Email: [email protected], www.saveeasyhaverfordwest.co.uk/
• Haven Credit Union Ltd, Milford Haven: T 01646 694080, Email: [email protected] or find out more on www.havencreditunion.org.uk/
• Robert Owen (Montgomeryshire) Credit Union Ltd: T 01686 623741, e-mail [email protected] or find out more at www.romcul.co.uk/.
• Red Kite Credit Union, central Powys: T 01982 551000 or 01597 824000, or find out more at www.redkitecreditunion.co.uk/
• Brecon and District Credit Union Ltd: T 01874 620104, email: [email protected] or find out more at www.breconanddistrictcreditunion.co.uk/
• Marches Credit Union Ltd, Kington: T: 01544 231926, Email: [email protected], www.redkitecreditunion.co.uk/marches.htm
There are 22 credit unions covering the whole of Wales providing services to more than 55,000 adults and young savers.
Members of a credit union save in a common fund. This fund can be then used to offer loans to the credit union’s members at affordable rates of interest. Because credit unions are financial co-operatives, member’s savings and any interest earned on loans stays in the local community to benefit local people. Many credit unions now offer a range of services, such as pre-payment debit cards, Individual Savings Accounts (ISAs) and insurance products. Some offer basic bank accounts.
For more information, including your local Credit Union, go to http://www.wales.gov.uk/creditunions or contact the Welsh Assembly Government Credit Union Freephone 0800 496 0865.
• Most illegal money lenders are originally friends with their victims or know them through friends of friends. They will usually appear to be helping out the borrower but once people are unable to pay, their behaviour often changes.
• Illegal money lenders very rarely offer paperwork, keeping the borrowers in the dark as to how much they are actually paying.
• Illegal money lenders are motivated by their own greed and most will add extra charges or interest payments until the borrower is trapped in a never ending spiral of debt. The highest interest seen is a staggering 131,000% APR.
• Illegal money lenders gain control over their victims and their finances. In some recent cases the loan shark has took hold of the victim’s bank or post office cards along with the PINs in order to withdraw directly from their accounts leaving them with little or nothing to get by on.
The Wales Illegal Money Lending Unit deals with the problem of illegal money lending in Wales. Many illegal lenders (loan sharks) have operated without impunity and used fear and intimidation to carry on their business.
If you are a loan shark victim, or think there may be a loan shark operating in your area, contact the Wales Illegal Money Lending Unit on the 24 hour Hotline on 0300 123 3311.
All calls are completely confidential and specialist officers are on hand to support and assist victims and advise on debt and other problems.
Borrowing from an unlicensed lender is not an offence. The offence will have been committed by the lender. WIMLU will not take action against any individual who has borrowed money but will try to help to get you back on the right track.
For further information on the work of the Loan Shark Teams, please visit the DirectGov website (External link).
For more information on the Co-operative Party’s campaign for stronger regulation of pay-day loan firms visit http://www.party.coop.