Avoid illegal lenders, consumers warned

The public should give loan sharks a wide berth as they charge extremely high rates of interest, it has been argued.

Faisel Rahman, a board member at Debt on our Doorstep – a body that seeks to encourage consumers to avoid such lenders – said there are many alternatives for people seeking finance.

“That might be their local credit union, which is an affordable provider of finance; or they might be a community finance organisation,” he noted.

Such bodies tend to be not-for-profit, ethical and can help with other matters such as getting a bank account, Mr Rahman added.

The expert made his comments as a report from affordable housing provider Circle Anglia showed that over 100,000 people turned to loan sharks before Christmas 2009.

It warned that the interest on the £29 million borrowed will total £82 million.

According to the latest Bank of England figures, formal unsecured lending (excluding credit cards) fell by £0.6 billion in November 2009.

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