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Loan Sharks and Pay Day Lenders

It is estimated that 165,000 households in Britain use illegal money lenders and that many thousands are in serious debt to them. The borrowers are people with a bad credit history or who cannot manage their finances or whose income is very low. The current recession is blamed for the squeeze on people’s incomes and state benefits are rarely enough to fill the gap. In extreme cases, parents resort to stealing food.

The poor are fertile territory for doorstep lenders. If you are desperate and the kids haven’t eaten for three days, a person coming to the door and offering a loan seems like the Messiah. In fact, they are a pack of wolves.

Demands for action against loan sharks led to the establishment of official Illegal Money Lending Teams which operate across the country. They claim to have secured 222 prosecutions, assisted 19,000 victims and secured prison sentences on perpetrators totalling 150 years.

Debra Wilson wanted to buy a computer for her daughter as a Christmas present. Th…

Taking the pain

A report showed 43% of Scots say they struggle to make it to pay day.
The report by insolvency trade body R3 showed that, over the past three months, 539,000 Scots have taken on additional debt through credit cards, loans and increased overdraft facilities. According to the quarterly personal debt snapshot that equates to 13% of the Scottish population.

More than 200,000 Scots had taken out a high interest payday loan in the last year. But one in five Scots say that after receiving payday loans they then struggle to repay them.

R3 Scottish council member John Hall said: “It is extremely worrying that such a large percentage of people are struggling to make it to pay day and that many are using pay day loans to bridge the gap. These loans tend to have high interest rates and often those who use this type of credit find themselves in a vicious debt cycle, especially if they then experience a sudden job loss.”

John Dickie, head of the Child Poverty Action Group in Scotland, said: “With Gover…

The Struggle to Subsist

Nearly half of all UK families need two or more salaries to cover the bills and live comfortably, a survey from Scottish Widows suggests. Families with more than one child rely even more on two salaries, 51% of whom say they could not cope without them. High household bills and debts are putting pressure on family finances .

The survey revealed that a quarter of UK families have no savings while a further 25% have less than £3,000, figures showed.

The average two-child household has more than £100,000 mortgage, loan and credit card debt, the survey found. This compares to just £82,000 average debt for families with no children.

"This reliance on two incomes to buy and run the family home means millions of households are effectively doubling the risk of financial hardship should one of the breadwinners become unable to work," said Richard Jones, Scottish Widows spokesman.

Another report informs us that more than 30,000 people became insolvent in England and Wales during the firs…