The National Consumer Council (NCC) has welcomed the government’s plans to crack down on illegal lending.
Speaking on BBC Radio Five Live’s Wake Up To Money programme, Claire Whyley, deputy director of policy at the NCC, said that the issue of illegal lending is a “big problem” and that currently such methods seem like the only borrowing method for some.
“There are people who are completely excluded from most other types of credit and have no choice but to use illegal lenders, so that makes them incredibly vulnerable,” Ms Whyley told the programme, suggesting that people who have had county court judgments (CCJs) or similar credit problems in the past may turn to these lenders.
She added that people who cannot get credit elsewhere, perhaps because they have been declared bankrupt, can become “very dependent on them”.
Government intentions to crack down on loan sharks were revealed on Wednesday by John Hutton, secretary of state for business, enterprise and regulatory reform.