GROWING numbers of people could turn to predatory loan sharks out of desperation as the cost of living crisis deepens, a victim support service has warned.

It comes after it was revealed a couple from Caerphilly borrowed £100 from a loan shark and ended up paying back a shocking £96,000 to the illegal money lender after being indebted to them for the next 10 years.

Now, a victim support service has warned illegal money lending could be on the increase following recent rises in inflation and soaring energy costs.

Add the upcoming Christmas season into the mix, and people who are facing ever-greater financial pressures may leave themselves vulnerable to criminal money lenders, eager to take advantage of their worried and desperate victims.

Stop Loan Sharks Wales - part of the Financial Conduct Authority's Wales Illegal Money Lending Unit - said people often fall into the trap of a loan shark, "who may appear to be friendly and helpful in times of need but turn into a threatening presence further down the line".

Initial repayments may be followed by demands for higher sums, and threats or acts of violence.

The agency said tens of thousands of people could be at risk in Wales.

“In Newport, we had a case where a supervisor in a care home falsely claimed to be a representative of a loan company," said Ryan Evans, client liaison officer at Stop Loan Sharks Wales. "They were responsible for rotas and would withhold shifts from employees on zero-hour contacts, threatening victims with even greater fines if they missed a payment.

“We know that there are active loan sharks in Newport - the team is currently investigating a suspected loan shark in the area, and a search of the premises has taken place already with cash removed from the building.”

Sarah Smith, team manager at Stop Loan Sharks Wales, added: “Everyone we speak to is worried about the cost-of-living crisis.

"Before, most loan shark victims would be borrowing money due to unforeseen circumstances, like their fridge-freezer breaking down or their child urgently needing new school uniform. There’s been a shift over the last couple of years where the primary reason for borrowing now is to pay for everyday essentials like food and household bills."

On the loan sharks themselves, Ms Smith said: “Many of these illegal lenders don’t fit the stereotype. We’ve had cases where the loan shark has been in their 80s, or a supervisor taking advantage of staff on zero hours contracts; we’ve even had a loan shark operating in a leadership role in a church group.

"But the one thing they all have in common is their complete lack of empathy and greed.”

According to Stop Loan Sharks Wales, illegal money lenders, or loan sharks, often:

  • Appear friendly and helpful at first;
  • Make people pay back a lot more than they borrowed;
  • Rarely provide paperwork;
  • End up taking possessions such as bank cards or passport for security;
  • Target people in everyday places such as the school gates, over WhatsApp or at the pub;
  • Groom their victims who are often vulnerable people.

If you're worried about your own situation, or somebody you know, you can contact Stop Loan Sharks Wales for safe, confidential advice and support on 0300 123 3311.

Any suspected cases of fraud can be reported to Action Fraud on 0300 123 2040 or via actionfraud.police.uk/