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Loan sharks bite back
LOAN sharks are operating at record levels in recession-hit Sheffield, preying on the most vulnerable families - who owe up to £40,000.
Hundreds of people are known to be in the clutches of illegal money lenders, and Sheffield Homes' Money Advice Team is aware of 15 loan sharks with a total of up to 300 clients between them. The highest rate charged by a loan shark in Sheffield was the equivalent of 117,000 per cent.
But the shadowy nature of the business makes it impossible to know the true figure.
Reports from the estates - where almost a third of Sheffield Homes tenants, or about 14,000 households, are behind with their rent - reveal it is boomtime for doorstep lenders.
Nationally it is estimated 100,000 families turned to loan sharks over Christmas and took out 30 million in illegal loans - which will have almost tripled to 82m by the time they are repaid.
In the last three years, activity has increased from 165,000 to more than 200,000 households a year, or 22 per cent, says housing provider Circle Anglia.
Alison Whitehead, of Sheffield Homes' Money Advice Team, is dealing with the 30 worst cases of debt.
The average amount owed is 15,000, but the highest owes 40,000.
Most victims have racked up huge sums on credit cards, catalogues and bank and car loans, but loan sharks also play an important part.
Alison said: "In the last eight months we have had a lot more reports of illegal money lending.
"Loan sharks fill the vacuum when there's a lack of credit.
"The recession has seen a large drop in affordable mainstream credit, and we won't ever get rid of this situation while people are unable to afford it."
Dependence on casual borrowing is so widespread in some parts of Sheffield that even communities can turn against an individual who dares to 'shop a shark', Alison added.
Intimidation and shame also help the practice flourish and prevent people speaking out.
In the meantime, priority debts such as rent and fuel bills, are forgotten in the face of a heavy at the door demanding cash.
Alison said: "We need to encourage people to save for things, rather than just going out and getting loans."
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Weather for Sheffield
Wednesday 23 May 2012
Today
Sunny spells
Temperature: 13 C to 23 C
Wind Speed: 7 mph
Wind direction: North east
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