"A growing number of people in the UK are likely to use loan sharks during the recession, according to a local government think-tank.
An estimated 35,000 more people could turn to illegal money lenders because of the squeeze by traditional lenders.
The New Local Government Network report said Stoke, Gateshead, Lincoln and Manchester were among the places most likely to be targeted by loan sharks.
It called for councils to pump funds into credit unions.
"There is evidence to suggest that the pernicious trend of illegal unsecured lending at extremely high rates of interest, or loan sharking, is making a comeback," said the report's author, Chris Leslie"
I know that I would personally never go down this route. Ultimately it will lead to even more stress and debt and you would be better advised to seek help for your debts. A loan shark will often charge incredibly high rates of interest which will only make repayments harder for you to make.
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( 3 / 313 )If you have ever been in debt then you may have experienced cold calls from debt firms. According to the BBC site there are around 10 of these firms that are still making these cold calls to an unacceptable level. It would also seem that many of these also failed to be truthful concering the reason for their call.
"The Office of Fair Trading has warned 10 firms to stop making unsolicited and misleading calls to advertise services.
The six debt management and four cold-calling firms were told they could face formal action if they failed to stop.
It came after the trading watchdog and the Information Commissioner's Office received a large number of complaints about the firms, which cannot be named.
The OFT said it was "completely unacceptable" for companies to take advantage of people with debt problems.
Vulnerable
Some firms may also have broken the law with the calls, the OFT said.
"Taking advantage of people who are suffering distress through debt problems is completely unacceptable and this practice of illegal or misleading cold-calling for debt management services must cease immediately," said Nigel Cates, deputy director of consumer credit at the OFT"
Unfortunately some companies will do anything to reclaim their money it would seem. For more information on this topic, why not have a look at our section on creditor harassment.
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( 3 / 314 )According to the Guardian the financial ombudsman are receiving more complaints then ever regarding the sale of financial products. It also states that many of these complaints are coming from those struggling to repay their debts and loans.
"The number of complaints about the way financial firms deal with customers' personal loans and credit cards has risen by more than a third over the past year, according to figures set to be published tomorrow by the Financial Ombudsman Service (FOS).
The FOS, the independent service for resolving disputes, saw complaints about personal loans – traditionally a small part of its case load – rise by 44% between 2007/08 and 2008/09.
The number of complaints about credit cards, now the second most complained about financial product after the controversial payment protection insurance (PPI), was up by almost 30% to around 18,000.
The ombudsman's report is expected to show a significant number of complaints now come from households struggling to pay back what they have borrowed and who believe their lender is treating them unfairly by, for example, refusing to negotiate on debt repayments or treating them unsympathetically"
This can be a big problem for many people as the article highlights that a number of these loans should most probably not have been sold in the first place. If you are struggling with debt then why not contact us.
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( 3 / 309 )Over the bank holiday weekend I saw this article in the Guardian which explains that the amount of people with bad debt is steadily increasing and this can really impact on your ability to obtain a mortgage.
"As the recession continues to bite, the number of people with less-than-perfect credit histories is rising rapidly. But, at the same time, many of the mortgage companies catering for such people have either stopped lending or disappeared completely – and the few that are still open for business are very nervous about who they lend to.
As a result, if you have got any kind of black mark on your financial record, getting hold of a mortgage is a struggle.
Pamela Allen is one such would-be homebuyer. She earns more than £50,000 a year and has been in the black for the past three years, but has a default on her credit file relating to some missed credit card payments back in 2004. However, the £4,500 was subsequently repaid, and the default is due to be removed in October 2010"
The article goes on to say that part of the reason for this is that due to the recession, many companies specialising in bad credit mortgages are closing. In such cases, it recommends waiting until your default has been removed.
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( 3 / 309 )With so many people in debt I guess it was inevitable that those organisations who aim to help would become overwhelmed. According to an article in the Guardian a new scheme will soon be piloted to see if those in debt could self assess to enable these organisations to help as many as possible.
"Thousands of debtors using free debt advice services could be asked to undergo "self-help" in a bid to ease the increasing strain on advisers.
Debt advice organisations are currently in talks about running a pilot scheme that would see more financially aware debtors tackle their own problems. Instead of spending hours with a debt adviser filling out a budget sheet they would be given guidance and sent away to do it themselves.
The completed sheet would be approved by a debt advice service such as Citizens Advice or the National Debtline and sent on to any creditors.
The Money Advice Trust, the debt charity that runs the National Debtline, believes the scheme could cut face-to-face advice time from a typical five hours to one hour"
This does sound like a good idea in principal so it will be interesting to see how it works out.
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