Assessing the impact of illegal money lending on consumers
15 January 2010
Today, Circle Anglia published a new report produced by The Financial Inclusion Centre on the potential impact of illegal loan shark lending on vulnerable consumers at Christmas.
The key findings include: up to 100,000 households turned to loan sharks at Christmas 2009; the value of illegal loans taken out at Christmas 2009 was an estimated £29m but victims will end up repaying a total of £82m; the average cost for these illegal Christmas loans was equivalent to 825% APR; a consumer borrowing a typical amount of £288 from an illegal lender would end up paying back nearly three times this amount (£820); it will take more than a year for the typical family to repay their Christmas debts; but borrowing from a third sector community based lender such as a credit union instead of a loan shark would save a typical low income household £500 (based on the original loan of £288).
The report was produced by Gareth Evans and Mick McAteer from the Centre. To obtain the report, please click below:
For the press release and more details on Circle Anglia, please click below: