STRUGGLING borrowers are at risk of being preyed on by illegal moneylenders, according to a new report which highlights shocking examples of loan shark victims in Scotland.
Overall one in 14 (7%) of people across Britain surveyed in June said they or someone else in their household has borrowed from an unlicensed or unauthorised informal money lender who charges interest in the past three years.
Researchers also spoke to people about their experiences of loan sharks as well as illegal lenders in a number of cities, including Glasgow.
READ MORE: Fears raised over loan sharks preying on Glasgow families amid cost-of-living crisis
One person told how they borrowed £500 over a year – and faced paying £5500 back, while threats of violence against borrowers and their families were also commonly reported.
The poll was carried out by Ipsos UK among more than 1800 people aged 18 to 75 across Britain and commissioned by not-for-profit financial inclusion organisation Fair4All Finance.
The organisation is concerned the problem could grow as people look for ways to meet their living costs.
It warned illegal money lenders may present themselves as “friends” to their customers or operate out of businesses which appear legitimate, such as some cafes or pubs.
Some loan sharks may charge people double the amount they originally borrowed and in some cases people are unaware how much they are being charged, it said.
One victim in Glasgow said: “I needed to pay something like £5500 back for taking out £500 over a year, they were obviously not happy with a year, they were giving month to month.
"I kept dragging out and then eventually I had to go to my mum and dad and borrow two and a half from them and then that is when I went to Amigo loan and got two from them.”
Another said: “Stuff was going to happen to me, but not just me, I get threats came for hurting my family, do you know what I mean? It was oh your mum is getting this, your brother is getting this.”
READ MORE: Scottish Illegal Money Lending Unit launches site to battle loan sharks
In another example, a person in Glasgow said: “I knew the man and I knew of violence that has been dished out by the man, he just needed to tell me that I had to grow (cannabis) because I owed him money and I needed to pay my debt and it was …violence was never directly said but I had seen him give someone a leathering with a metal pole.”
Sacha Romanovitch, chief executive of Fair4All Finance, said: “There is a growing consensus that structural change is needed to create a credit market that serves everyone.
“Fair4All Finance is convening support from across the financial services sector, regulators and cross-party policy makers to ensure that mainstream banks and lenders better serve millions of creditworthy, lower income individuals alongside accelerating the scale up of community finance provision.”
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