Loan sharks pile on debts misery

RUTHLESS loan sharks are ruining lives of debt-hit Oldhamers as the credit crunch bites.

Oldham’s Labour leader Councillor Jim McMahon says there are a number of local operators charging interest rates as high as 2,000 per cent and using violent and intimidating means to get their money back.

He added: “They claim they can help people in short-term financial difficulty but we all know how easy it can be to get stuck in a circle of borrowing to pay off loans — the result is many poorer families get straddled with hundreds of pounds worth of interest.”

The problem is rife in Hollinwood where there have been reported cases of loan sharks taking possession of child benefit books, smashing windows and using weapons to intimidate terrified borrowers.

One young woman had her house ransacked because she missed a repayment after borrowing £300 and being told to pay back £2,000.

Another elderly woman ended up paying back a loan that wasn’t even hers because she was so scared of the loan sharks banging on her door.

Typically companies will lend against a post- dated cheque for around a month with interest charged daily.

Oldham’s Labour Group is encouraging people to explore alternatives such as Oldham Credit Union which charges more realistic rates of interest.

Councillor McMahon said: “The council needs to look carefully at what support it can offer to the local credit unions and to the public to ensure these companies do not profit at the expense of the misery brought about by the downturn.”