Liverpool Council issues loan sharks warning as cost of living crisis bites

Liverpool City Council is urging residents not to turn to loan sharks to cover the rising cost of living and pressures on household finances, and instead look at alternatives such as credit unions.

Figures from the England Illegal Money Lending Team – a specialist national Trading Standards unit with a remit to investigate and prosecute illegal money lenders – shows that nearly one in ten people turned to loan sharks to cover the costs of Christmas last year.

More than half of victims turned to illegal money lenders in order to pay for essentials such as utilities, food and fuel in the first half of 2022 and the council warns that ‘debt can quickly sprial out of control’.

Instead, the local authority suggests alternatives such as credit unions, which typically offer lower fees, higher savings rates and a more personalised approach to customer service for their members.

Rising use of lone sharks

The Centre for Social Justice recently estimated that 1.08 million people in England could already be in debt to an illegal money lender. This is over 700,000 more people than the most recent official estimate.

It has also been reported that the greatest number of Illegal Money Lending Team (IMLT) operations have taken place in the North West, owing to a large concentration of cases in Manchester, Lancashire, and Merseyside.

What has been said?

Deputy Mayor of Liverpool Cllr Jane Corbett, said: “We know this is a really difficult time of year for many people as they feel the pressure of the Cost of Living crisis.

“There is a long and proud history of credit unions in the city. They are a great way to save, bank and borrow, typically offering lower fees, higher savings rates and a more personalised approach to customer service for their members.

“In addition, credit unions may offer lower interest rates on loans, particularly compared to payday or doorstep lenders. They are also suitable for people who may not be eligible for services from a high street lender.

“Debt can quickly spiral out of control and if you’re borrowing money, it’s important to check that your lender is genuine.

“The post-Christmas period and January is going to be very difficult for thousands of people across the city. Local credit unions understand the pressures they are under and are run by local people, and are there to help and support them. I’d like to thank all of the volunteers and staff for the work they do.”

Seeking help

If you are worried about loan sharks, contact the Stop Loan Sharks 24/7 Helpline on 0300 555 2222 for support or visit www.stoploansharks.co.uk.