Unscrupulous individuals and companies are on the look-out for vulnerable people at this time of year and some will even knock on doors in a bid to secure business. They know it’s easier to tempt people into debt at Christmas when many of us are already feeling under pressure to buy expensive gifts and a mountain of food and alcohol. Indeed, the lure of quick cash with no questions asked can be difficult to turn down, but loan sharks – these are unlicensed money lenders – charge exorbitant rates of interest and must be avoided. A story published in the Daily Mail in 2009 told of a woman who borrowed £500 from a loan shark, which cost her £88,000 to pay back. This took seven years and in the meantime she suffered two strokes, allegedly from the stress.

 

Most online pay day loan operators are not loan sharks, but individuals should be wary of borrowing from these sources too. Many charge in excess of 1,000pc APR so represent a very expensive way to borrow.

 

Loan sharks should be reported. Details on how to do this can be found on direct gov http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10035958