October 1, 2022

Loan sharks trap UK’s poorest amid cost of living crisis

From fuel to food, prices for everything have soared in the United Kingdom (UK), plunging people into a ‘cost of living crisis’. The crisis is making it increasingly difficult for households to make ends meet. And to make matters worse, it is the unlicensed lenders who step in and offer loans to the desperate at astronomical interest rates.

But the nightmare does not end there. Some loan sharks have even kidnapped and raped individuals for extortion, according to a BBC report.

PA Media

According to debt-victim Kim, who asked the BBC not to use his real name,”It’s just endless. You know you’re working hard for that money and paying back those huge sums when maybe you only had a small loan, but you know you’re paying them back double.”

At one point, Kim and her partner, who live in the North West of England, had taken out four loans from the same unapproved lender and were paying more than half their net income in interest.

The lender would report to the house at 7:30 a.m. There were constant messages on social media that the lender knew when payday was and Kim worried that she was going to chase her at work.

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Kidnapping and even rape for extortion

Matthew Greenwood, acting debt manager for the Center for Social Justice (CSJ), told the BBC “They borrow to finance day-to-day living expenses, like a gas or electricity bill, things as small as a pram, and then they are exploited by these people who try to extort as much money from them as they want. can get away with, offering arbitrary terms, little to no paperwork, and an exorbitant refund rate.”

Threats can turn into real violence in some cases, he says: “We’ve seen loan sharks kidnap individuals and we’ve even seen loan sharks go as far as rape.”

Read also; Luxury villa in UK’s most expensive street is up for sale for £22.5m

People protest the UK cost of living crisis

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Unlicensed lenders

Since people didn’t want to talk about debt, there is little data on unlicensed lenders, but research by think tank CSJ last year interviewed a representative sample of 3,363 people in England. Of these, 81 (about one in 40) were borrowing from unapproved lenders at the time.

BBC report says loan sharks have long operated in housing estates in poorer areasbut are increasingly using social media to drive business and threaten customers.

Even for Kim, the realization of the loan shark came when, at Christmas, she asked the lender to delay the next payment so she could give presents to her children.

When the lender refused, she tried to contact “head office”, but found no trace of a loan company she had been led to believe was legitimate.

Eventually she went to the authorities and the lender was arrested.

But what about the other victims? It’s fair to say that It remains to be seen how long would such crimes and frauds haunt the British people.

Also Read: How Sri Lanka’s Economic Crisis Made Used Cars Cost More Than a Luxury Apartment

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