People suffering financial difficulties due to the Covid-19 lockdown are at risk from high interest doorstep lenders, warns Leeds Credit Union (LCU).
These lenders been campaigning in some of the city’s most deprived areas, says LCU, with interest rates as high as 466% APR. The credit union is also concerned that illegal loan sharks are capitalising on the situation; in these cases, APR can be unlimited and repayments are sometimes enforced by intimidation and threats of violence.
Leeds Credit Union warns that even though some doorstep lenders have stopped home visits and collections, they have instead stepped up their targeting of some of Leeds’ most vulnerable people through postal advertisements and online marketing.
To address this, LCU’s Money & Budgeting Service is offering a one-to-one telephone service for those experiencing financial problems or with worries about money. Individuals facing financial hardships can contact the team to discuss their situation and explore available options to help them overcome these challenges.
Managing director Chris Smyth said: “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.”
A financial co-operative, LCU is owned by 36,000 members. To support them, the credit union has set up additional contact numbers and launched a new mobile banking app to enable them to access their accounts remotely.