Abacus Daily Debt News

Loan sharks ‘increasing’ personal debt levels

The use of loan sharks by some of the country’s poorest households to pay for Christmas will see £82 million worth of debt incurred this year, a study conducted by the Financial Inclusion Centre has found.

Commissioned by affordable housing service Circle Anglia, the research revealed that over the festive season, an approximate total of £29 million in doorstep loans was taken out, averaging almost £300 per house, the Times reports.

And the number of people using loan sharks has increased from 165,000 a year to 200,000 a year in 2009 and Andy Doylend of Circle Anglia described these statistics as "very concerning".

"We hope that by turning the spotlight on loan shark activity, we can help more people to seek help and get sound financial advice," he said, noting that opting for community finance or a credit union for borrowing needs could have saved £500 in debt payments.

Meanwhile, Frances Walker of the Consumer Credit Counselling Service recently stated that doorstep loans are necessary for some people who have less money or poorer credit scores.

By Sarah Adie