The Trading Standards Institute (TSI) claims that illegal money traders “not only make financial debt worse” but can use threats and violence to intimidate people into paying high interest rates.
Ron Gainsford, chief executive of TSI, said: “Loan sharks prey on the most vulnerable people in society, bringing misery and fear to those who borrow from them.
“The pressure to spend at Christmas is greater than ever, adding to the spiralling level of debt in the UK.”
His comments follow the collapse of the Farepak Christmas saving scheme, prompting fears that those affected may look elsewhere for funds, but debt help is available.
Jacqui Kennedy, from Birmingham city council, added that people should look at their debt management and be aware that debt advice is at hand.