Money advice service to open at the Indoor Market
A community money advice service, designed to help those who struggle to get credit – and are therefore more likely to go to loan sharks.
Birmingham Money is a joint venture between Advance Credit Union, City Save Credit Union and Money Line, based in the Community Hub, at Bull Ring Indoor Market, Edgbaston Street, and will be launched by members of Birmingham City Council’s Financial Inclusion Partnership on Thursday (June 30).
Once launched, the savings and borrowing advisory service will be open Monday to Thursday between 1pm and 4pm, and initially operate for six months.
Staff from the three partner organisations will offer advice and be able to administer loans, but will also encourage consumers on ways they can save money.
Set up by Birmingham’s Financial Inclusion Partnership and hosted by Birmingham City Council, England’s Illegal Money Lending Team aims to help people who struggle to gain credit for household items and may be more susceptible to loan sharks.
Borrowing from loan sharks can soon spiral as a result of extortionate interest fees and more being added on to the original amount, if any payments are missed. With little or no paperwork setting out the loan’s terms, it can be very difficult to prove what was originally agreed.
Councillor Barbara Dring, Chair of the city council’s Licensing and Public Protection Committee, said: “The new Birmingham Money service will help us address debt and poverty in our community, as well as provide advice on savings and borrowing, so I would urge people to visit the team at the Indoor Market for free, impartial advice.
“I am concerned that some people cannot access mainstream financial products, like bank accounts and low cost loans: instead they turn to the alternative credit market, often paying much higher levels of interest, which can lead to financial and social exclusion as well as poverty.
“Through this project, which will provide easily accessible advice, we are able to raise awareness of this horrendous crime and prevent people from falling prey to loan sharks.”
An estimated 310,000 households across the country are in debt to a loan shark.
Loan sharks usually appear friendly at first but quickly trap their borrowers into spiralling debt. As the debts can’t legally be enforced many lenders will resort to the most extreme and callous methods to enforce repayment including threats, intimidation and violence.
Paperwork is rarely offered and victims are often in the dark as to how much they are actually paying. Exorbitant extra amounts and interest are added at random – the highest interest seen by an illegal lender was equivalent to 131,000% APR. In some cases the loan sharks have been known to take items as security including passports, driving licences or even bank or Post Office cards with the PIN in order to withdraw directly from borrowers’ accounts.
To report a loan shark call the Illegal Money Lending Team’s 24-hour hotline 0300 555 2222,text 07860 022 116 or email firstname.lastname@example.org