Families urged not to borrow from loan sharks

HOUSEHOLDS struggling to cope with the financial pressures of Christmas because of recent budget cuts are being warned to avoid resorting to unlicensed moneylenders by the National Consumer Agency (NCA).

According to the NCA, a quick loan can result in people falling into the trap of unmanageable debt in the new year. They said that without the protection of the Financial Regulator’s code for licensed moneylenders, people who use unlicensed moneylenders are left extremely vulnerable if they cannot afford to pay the loan back.

NCA assistant director of public awareness and financial education, Áine Carroll, said it is vitally important for people to know the difference between ‘loan sharks’ and licensed moneylenders. “Make sure not to borrow from loan sharks — who are criminals — no matter what the situation, because if you can’t pay those people back you have no protection.”

A spokesman for the Money Advice and Budgeting Service said people need to be aware that a loan which may seem affordable could quickly become unaffordable if a person’s circumstances change.

Saint Vincent de Paul (SVP) is also warning people to avoid taking loans from moneylenders after they were made aware of licensed moneylenders distributing leaflets in estates across Cork and Dublin. SVP head of social justice, John-Mark McCafferty, said he would encourage people to talk to MABS or SVP before going to a moneylender.

* To check if a moneylender is licensed visit www.registers.financialregulator.ie.