Families struggling with the costs of sending children back to school are being urged to avoid borrowing from loan sharks.
The warning has been issued by the England Illegal Money Lending Team (IMLT) following recent cases involving loan sharks taking advantage of cash-strapped parents.
According to a 2020 survey by charity The Children’s Society of 1,000 parents across the UK, parents with children in state-maintained schools spent on average £337 per year on school uniform for each secondary school child and £315 per year for each primary school child.
If you’re on a low income, you might be able to get help with some of the costs of sending your child to school, including school meals, transport and uniform.
Check if your local council provides help with the cost of school uniform and PE kit. If your council does not offer help, ask your child’s school directly.
If you need to borrow money, a credit union loan can be an option worth considering. Credit unions offer a variety of low-cost loan and saving products to their members.
Remember, loan sharks charge extortionate interest rates and often intimidate, threaten and trap vulnerable victims in a cycle of fear and violence. These criminals may seem friendly at first but borrowing from them can have serious consequences.
Some lenders have been known to take passports, driving licences, benefits and bank cards as security for the loan, and many begin to make their borrowers feel threatened or intimidated. Some even become violent towards their victims if they fail to pay, leaving them terrified.
Tony Quigley, Head of the England Illegal Money Lending Team, said: “Back-to-school is always an expensive time of year, especially for families earning lower incomes who may struggle to cover the costs of uniform and supplies, making them more susceptible to loan sharks.
“We urge parents not to struggle alone and to instead seek the financial support that is available to them. Loan sharks should always be avoided because their actions can have a massive financial and emotional impact on peoples lives.
“If you or someone you know has been affected by illegal money lending, it’s important to reach out for help as soon as possible as loan sharks will keep chasing the money.
“You can get in touch with us any time of day or night, either by picking up the phone, email or chatting online with us – whatever’s most comfortable for you. We are here to help and listen.”
Mum-of-seven Leah, whose name has been changed to protect her identity, has shared her harrowing story to help others avoid falling into the same trap.
Leah was introduced to the loan shark through a neighbour who had also borrowed money. She found herself in financial hardship and borrowed £1,700 over multiple loans but ended up paying back an outrageous £31,000.
Her first loan of £100 to buy school uniform for her children very quickly spiralled out of control.
Leah feared for her safety at the hands of the unscrupulous lender who was demanding payment of £100 a week. She was punched in the face when she questioned the loan shark about how much she still owed on the loan.
The terrified mum was trapped in a merciless cycle of debt for six years and fell into severe rent arrears because she was handing over all her benefits to the loan shark. She resorted to shoplifting to make ends meet.
Leah’s case was investigated by the IMLT after a referral was made by the housing association who were concerned about the loan shark exploiting their tenants.
The loan shark was investigated by the IMLT and Leah has not had any contact from the lender since the report was made.
If you have been affected by loan sharks, or you’re worried about someone you know, contact our 24-hour helpline on 0300 555 2222 for specialist advice and support.
You can also email us at email@example.com or start a live chat with us between 9am and 5pm, Monday to Friday. Just click the chat box in the bottom right hand corner of the screen to talk to our support team.
Make sure you are receiving all the financial support with back to school costs you are entitled to. You can use the Turn2Us free and easy-to-use Benefits Calculator and Grants Search tools to check what benefits you might be able to claim and what grants you might be able to apply for.
Find out what help you can get to pay for school lunches, uniforms and transport if you’re on a low income through your local Citizens Advice.
Find a credit union today to help prepare for back to school expenses at www.findyourcreditunion.co.uk