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Christmas Loan Sharks 'Should Be Avoided'

Nov 1, 2007
Consumers who have previously used Christmas hamper schemes to pay for their festive food and drink have been warned that loan sharks or doorstep lenders are not a suitable replacement as credit providers and that there are other options available.

According to Blackburn with Darwen council's advice service, the Jubilee Tower Credit Union and the Citizens Advice Bureau, people looking for cheap loans or other forms of credit to help them in the run-up to Christmas should not be tempted by loan sharks. While such lenders can often offer an easy loan, the result could be that consumers are left with unmanageable levels of debt following the Christmas season.

"With the collapse of Farepak last year, people may have turned away from pre-paid Christmas hamper schemes and think their only options are credit or loan sharks," said councillor John Slater, executive member for citizens and consumer rights, according to the Blackburn Citizen. "We can help them consider other alternatives."

The coalition of organisations is encouraging residents of the area to plan ahead for any yuletide spending, including either a commitment to saving or looking for more mainstream options for a personal loan following the demise of Farepak and possible lack of confidence among consumers in similar schemes this year.

"There are huge extra financial pressures on people at Christmas time and, by encouraging people to plan ahead, we hope to ease some of those pressures," the councillor added, suggesting that consumers need to ensure they are as prepared as possible when they begin their spending on Christmas presents, food, drink and decorations.

Citizens Advice recently expressed its concerns about the levels of debt that consumers were taking on across the nation, suggesting that people are unable to afford the kind of credit they are acquiring from lenders and credit card issuers.

Speaking to the Metro, Moira Haynes, a spokesperson for the Citizens Advice Bureau, said that there is plenty of evidence to suggest that Britons are not borrowing sensibly when it comes to loans and credit. "There's a lot of evidence showing people have overcommitted themselves. People are getting credit and it's clear they are not able to afford it," she said.

A poll commissioned by the organisation in September revealed that money is one of the top worries for young adults, ahead of both their own health and their family's welfare. This is a pressure that could increase in the run-up to December 25th, which could result in them making the wrong choice about the provider of a cheap loan.

Also last month a trial began in the north-west in association with Consumer Direct, offering residents in the region free independent financial advice both over the phone and face-to-face. Findings from the trial, which will end in the middle of December, will be used as part of the Independent Review into Generic Financial Advice, being run by Aegon chief executive Otto Thoresen. Mr Thoresen's review intends to look at ways to improve consumer confidence in dealing with their personal financial affairs.
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Steve Smith writes for the 1 Stop Finance Shop where you can apply online for debt consolidation loans. We specialise in all sorts of personal loans, and secured loans with online application.
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