Credit Unions Saving Members from the Jaws of Loan Sharks

Friday 26 January 2024

Credit unions are in the position to offer financial services to people unable to access mainstream credit and would be vulnerable to illegal lenders. A study conducted by the Financial Inclusion Centre in 2022 estimated that more than 3,700 people in Luton are in debt to loan sharks – approximately 1.6% of the Luton population.

Having recognised this, Luton-based Money Matters Community Bank partnered with Luton Council to address the danger of loan sharks by promoting education, collaboration, and responsible lending practices as promoted by credit unions.

“We believe that credit unions like ours are at the forefront of the fight against loan sharks”, said Dennis O’Connor, Chair of Money Matters Community Bank. “In a financial landscape where predatory lending practices continue to harm our communities, credit unions like ours are a beacon of hope.”

Similarly, CLEVR Money Credit Union is speaking out against loan sharks as a Fair4All Finance report included interviews with illegal lenders in Preston and victims of loan sharks. For many, credit unions can offer safe and low-cost loans as a lesser-known alternative to banks and building societies.

“We recently spoke to a member who thought he had found kindness when a friend lent him the money to fix his broken car, which was essential for getting him to work. That friend turned out to be a loan shark.” Said Jackie Colebourne, COO at CLEVR Money Credit Union.

Jackie continued: “Following a long period of threats and abuse, the member ended up with broken windows around his house. After dealing with the loan shark situation, he approached CLEVR Money for help repairing his home. We lent him money to repair the damages and he’s in a much better position now.”

Visit the Stop Loan Sharks website to know how to spot the signs of an illegal lender and find a credit union that’s right for you.