The Scottish Illegal Money Lending Unit (SIMLU) has launched a new support service for Scottish loan shark victims, struggling to deal with loan shark debts reports both the Daily Record and Herald newspapers.
The unit’s new website – stopillegallending.co.uk – has been set up to provide dedicated advice and support.
Trust Deed Scotland recently reported on a clampdown by Manchester City Council on payday loan providers opening in-store locations in their city, with the English local authority fearing that many more people are turning to high cost, short term lending solutions to deal with their problem debt.
On average, loans that are taken out from illegal lenders end up costing three times as much as a regular, unsecured loan the Financial Conduct Authority (FCA) has previously said.
As the country continues to recover from economic and financial uncertainty following successive lockdowns and restrictions, many people have been forced into taking out loans with payday loan providers, with many more borrowing with credit cards and bank overdrafts to pay for essential living expenses, from food and basic living expenses to even paying off their council tax arrears.
More worryingly, a growing number have turned to illegal loan sharks in Scotland as a last resort.
Scottish loan sharks have been taking advantage of the pandemic, and have been known to adopt illegal methods of debt collection, including violence, theft and in the most extreme cases, forcing borrowers into prostitution and drug dealing.
With recent cuts to Universal Credit also expected to cause extended stress to households already struggling with debt, people across Scotland could find themselves borrowing from loan sharks. Indeed, The Guardian earlier this year reported that as well as traditional tactics at the community level, loan sharks are said to targeting new loan shark victims via social media platforms including WhatsApp and Facebook.
As well as supporting victims of Scottish Loan Sharks, the group aim to help more residents in communities throughout Scotland report illegal loan shark activity safely and:
- Immediate support with any urgent issues
- Longer term support to assist you in moving away from using loan sharks
- Help to access local services, including debt advice services, credit unions, addiction counselling and local support groups.
Stop Loan Sharks Scotland Charter Mark
The new recipients of the Stop Loan Sharks Scotland charter mark, a scheme initially launched last Christmas to crack down on scams, are social enterprise Scotcash and charity Grampian Regional Equality Council (GREC) in recognition of their commitment to supporting and promoting the work of the SIMLU and for taking a zero-tolerance stance on illegal money lending within their communities.
Speaking on the launch of the new service, Fiona Richardson of Trading Standards Scotland commented:
“I am delighted that Scotcash and Grampian Regional Equality Council have signed up to the Stop Loan Sharks Charter Mark.
We have been working with Scotcash over a number of years to tackle the problem of illegal money lending and we have been working with GREC over the past year on a prevention project.
By signing up to the Charter Mark, both organisations confirm their ongoing commitment to work with us on this problem. We will work together to promote the message that you should not use loan sharks, but also to make sure that, where somebody has ended up using an illegal money lender, they know where to go to receive the appropriate help and assistance.
In a period of great financial uncertainty, it is important that we take all the steps we can to stop people from borrowing from loan sharks and getting trapped in a cycle of debt and intimidation.”
While payment breaks may have ended for more, lenders are still obliged to offer tailored support to those struggling with their debt.
Where an individual is struggling with unaffordable debt, help is available from a number of Scottish debt charities and organisations such as Trust Deed Scotland, who can offer tailored debt advice given by an experienced debt advice team.
As a leading debt solutions provider in Scotland, we have already helped 25,000 people in Scotland, and have also gained 8,000 Trustpilot reviews in the process. We’re suitably placed to give you tailored debt advice, and by speaking to us, you’ll have a better understanding of the options available to you.
Considering borrowing money to repay debt?
If you are struggling with debt and considering borrowing money from any other source of lending, firstly consider your own affordability and whether you will be able to repay the money you are borrowing. This doesn’t just apply to loans, but other forms of borrowing such as credit cards and buy now pay later agreements.
If you feel that you have unaffordable debts and cannot manage to repay the debt, don’t borrow. Borrowing money to repay debt, via an illegal loan shark, or a high-cost lending source such as a payday loan is never a good idea, but especially when you are unable to continue the repayment of these finances.
Never pay a non-priority bill (e.g. credit card debt, payday loan) in favour of a priority bill (e.g. mortgage, rent, council tax)
Seek help immediately. You can get free and impartial help with money, set up by the government: MoneyHelper, an independent service set up to help people manage their money.