Sharks Bite During Financial Uncertainty

Tuesday, April 21, 2020

Leeds Credit Union is warning residents across the region about an increase in high interest doorstep lenders capitalising on COVID-19 uncertainty. 

The credit union, which has more than 37,000 members, has seen a targeted campaign by these lenders in some of the city’s most deprived areas, with interest rates as high as 466% APR. However, there are also concerns that illegal loan sharks are also capitalising on the situation, where the APR can be unlimited and sometimes repayments enforced by intimidation and threats of violence.

During the lockdown, Leeds Credit Union’s Money & Budgeting Service is offering a one-to-one telephone service for those experiencing financial problems or with worries about money. The team will be on hand to talk through any individual's current situation and will look at what options are available to help steer them through.

And whilst a number of the more well-known doorstep lenders have stopped their home visits and collections, there is evidence that they have instead stepped-up their targeting of some of Leeds’ most vulnerable people through postal advertisements and online marketing.

Chris Smyth, managing director of Leeds Credit Union, commented: “Leeds Credit Union already works closely with the Government's Illegal Money Lending team to stamp out loan sharks in the Leeds region, and our focus has always been on ensuring people across the city have access to flexible, affordable and fair lending.

“We are disappointed that some are using the COVID-19 pandemic to take advantage of those struggling financially but frankly, we aren’t surprised. It further underlines the importance of credit unions across the UK ensuring those that need it most have access to financial services that can help during this time of uncertainty.”

Leeds Credit Union, which was recently named as the region’s best lender, has reinforced its member services provision during lockdown, setting up additional contact numbers for members to get in touch. A new mobile banking app has also been made available ahead of its official launch so members can access their accounts remotely. Should members still need to visit a branch, Leeds City, Merrion House, Armley & Dewsbury Road branches are still open Tues, Thurs & Fri with social distancing and sanitation measures in place.