Britons, in particular the financially-vulnerable, could be set to receive better guidance towards taking out a loan, following the roll-out of a new scheme.
The news comes as the government has implemented a series of specialist teams across England, Scotland and Wales, which will target unscrupulous loan sharks, give consumers guidance on handling their debts and help them to choose fair and competitively-priced borrowing options. Following the launch of pilot programmes in Birmingham and Glasgow, an estimated 45,000 people have received guidance with their debt problems - which could consequently lead to them adopting a better attitude to managing loans and other areas of their finances.
But now the project, which has received 3 million pounds of funding, is set to help a much wider number of Britons with their money management in cities such as Leicester, Cardiff, Nottingham, Manchester and Newcastle. Swansea, Peterborough, Leeds and Plymouth are to be among the areas also to receive help.
Overall, more than 165,000 households, often living in "deprived inner-city areas", who are struggling to handle their finances are targeted by loan sharks. According to the government, such people who borrow from unscrupulous providers find that they not only have to pay "astronomical interest rates", which could actually increase their debt difficulties, but also may face "violence, intimidation or blackmail" if they struggle to keep up with repayments.
John Hutton, the secretary of state for business, enterprise & regulatory reform, asserted: "Loan sharks are criminals who prey on vulnerable and desperate people. We are committed to shutting these thugs down and bringing them to justice. Our targeted teams will make sure anyone who feels trapped or scared has the confidence to report these crooks and put a stop to their illegal behaviour".
Mr Hutton added that the government has invested some 50 million pounds into the provision of guidance on personal loans and other monetary topics for those who are financially most vulnerable as part of its Face to Face debt advice scheme.
Kitty Ussher, economic secretary to the Treasury, added: "Loan sharks prey on the least well off, using intimidation and violence to extort payment. The success of the pilots shows what can be accomplished by setting up dedicated teams to tackle illegal lending in the community. This crackdown sends a clear message that these practices are unacceptable and will not be tolerated and ensures that the victims of loan sharks have the advice and support they need."
Following the news, those concerned about difficulties in managing their money may wish to take out a low-rate personal loan with a reputable financial provider. However, upon borrowing money consumers have been advised to make sure that they are always in a position to make repayments. Research released by CreditExpert in May indicated that 80 per cent of Britons spend beyond their means, as one in ten have missed payments on personal loans, mortgages and plastic cards. Meanwhile, a quarter claim that money matters are hard to understand. Managing director Jim Hodgkins added that it is "imperative that people fully realise the implications of not managing their finances properly".
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