Christmas loan shark warning

Wed, Nov. 26, 2007

LOAN sharks are trying to exploit Christmas by targeting hard-up families in Warwickshire.People across the county are being offered Christmas loans through the post - with a staggering interest rate of up to 183 per cent. This repayment rate means that anyone offered a loan of £500 could face paying back £1,415 - nearly treble.

The warning comes from the Citizens' Advice Bureau which aims to help Warwickshire people in crisis. David Gooding, manager of Bedworth, Rugby and Nuneaton Citizens' Advice Bureau, is urging people to resist the temptation to take out an extortionate loan to finance Christmas. He has personally received an offer from a credit company through unsolicited junk mail to his home which has "set alarm bells ringing". The company is deliberately targeting low-income people by offering loans of between £50 and £500.

He said: "The loan offer is specifically aiming to attract those on low income including the unemployed, people with County Court Judgements and those renting their home offering 'no hidden charge or hassle' but seem to have been sent as a general mail-shot. "Their example shows a family can borrow a £300 loan now and repay it at £9 per week until after the following Christmas which means they end up paying a total of £504." Mr Gooding, who is chairman of the social policy group of Warwickshire Citizens' Advice Bureau, wants to alert people to the dangers of the loans. He said: "This is like going out to buy your Christmas presents and, however hard you try to hunt out the bargains, ending up paying almost double the shop price with a loan.

Source : http://iccoventry.icnetwork.co.uk