Farepak debt fears

The BBC has discovered that many former customers are turning to doorstep lenders who charge high interest rates, with reports that loan sharks are targeting some Farepak victims.

One consumer, Lisa Tuckwell, told investigators that she has been approached by people demanding to know if she needs money. However, loans that they offer can have a high rate of interest and push people deeper into debt.

Collapse of the Farepak saving scheme in October has already forced many people into debt despite the Christmas debt management plan it claimed to offer, although funds are being collected to help some of the victims.

However, people affected by the collapse have been told to seek out debt help rather than turn to loan sharks and other providers who give cash at a high loan rate.

“It is a double scandal”, said Janice Allen of the National Consumer Council in the same report. “The people who saved with Farepak thought they were doing the right thing. Now they find themselves forced onto expensive forms of credit.”

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