Desperate times push nearly 70,000 towards loan sharks
As many as 67,000, or 7%, of those struggling with debts say they have already contacted a loan shark or doorstep lender, while a further 13% have considered doing so. This is based on research by insolvency trade body R3 who have identified a group of 961,000 individuals who describe themselves as ‘struggling with debt but have not sought help’.
R3’s President Steven Law commented:
“Going to this source for financial resolution will simply build up a larger store of debt and create more pressure and stress. We must highlight the importance of obtaining professional advice over panic measures that will worsen the problem.
“Post-recession we stand on the brink of a personal insolvency crisis that will take years to work through the system as this finding indicates.”
The survey also reveals that almost one in four individuals struggling with their debts (23%) say they are avoiding contact with people they owe money to, while 30% have not spoken to their family or partner about their financial problems.
“Clearly traditional fears of what others may think or the fear of bankruptcy is still putting people off seeking a solution to their problems. Unfortunately, avoiding the problem or going to the wrong source is likely to only increase the eventual likelihood of bankruptcy,” concluded Steven Law.
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Methodology note: Commissioned by R3, research agency ComRes surveyed 1,961 members of the public who describe themselves as struggling with debt by online questionnaire, between 17 December 2009 and 7 January 2010. The sample is split into five sections, one of which is the 1,193 individuals who are struggling with their debts, but haven’t contacted anyone for help.
The questions asked were: Have you ever thought about contacting a loan shark or doorstep lender? And: Have you ever contacted a loan shark or doorstep lender?’. 7% of respondents said they had contacted a loan shark or door step lender; 13% said they had considered doing so.
As part of the same research project, ComRes established estimates for the numbers of individuals who have contacted their creditors themselves for extra time to pay their bills and the numbers of individuals who say they are struggling with their debts without yet seeking help. To do this, ComRes conducted an online profiling exercise surveying 64,416 members of the public about their personal financial situations online between 6 November and 2 December 2009. ComRes’s estimate for the number of people struggling with their debts without help is 961,000 individuals in Great Britain. Given that 7% of the group surveyed who are struggling with debts said they had contacted a loan shark, we can extrapolate to infer that as many as 67,270 individuals (7% of 961,000) have contacted a loan shark or doorstep lender as they try to deal with their financial troubles.
R3 Press Office