‘Loan shark’ warning as debt levels spiral across North West

Local people have been cautioned against resorting to using high interest loan companies amid warnings over the toll spiralling debt is taking.
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Former Derry community worker Frankie McMenamin said people in dire straights should not be left at the mercy of ‘loan sharks’ and urged anyone in such situations to seek help.

His comments come as Advice NI revealed that there has been what they termed a ‘staggering rise’ in the number of people seeking advice due to debt.

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The sharpest increase Advice NI’s money & debt advisers are seeing is in rates arrears, reporting an 89% increase in amounts owed.

Increasing numbers of people are having to seek out loans as they struggle to make ends meet.Increasing numbers of people are having to seek out loans as they struggle to make ends meet.
Increasing numbers of people are having to seek out loans as they struggle to make ends meet.

Mr McMenamin said the debt crisis was growing due to huge hikes in heating, electricity and food costs, and that the financial burden was keenly felt in Derry.

He also spoke of one woman who felt forced to take out high interest loans which she has struggled to pay back. He said he approached the woman after realising something was wrong and she confided she was worried about debt collectors returning. The woman has now sought advice from a local advice provider who have offered her assistance to manage the situation.

Mr McMenamin said many people were facing similar problems whereby debt companies could charge huge interest rates.

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“What I am saying to people out there is not to get into debt like this with these companies who I call loan sharks.

“I am urging those who are in that situation to go and talk to a welfare adviser. They will help you in whatever way they can,” he said.

Mr McMenamin said he was aware of several people whose mental health was badly affected by debt and people who were in debt who died by suicide.

He added that online gambling debt was also a massive issue.

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Advice NI said calls to its money and debt helpline have risen 34% since April 2021 and the charity has also reported a significant increase in the average amount of debt held by clients.

“After housing costs, clients are reporting average debts of £3,700 – a 21% increase on 2021 figures.”

Sinead Campbell, Advice NI’s Head of Money, Debt and Quality said: “The costs of energy and groceries have been going up across the board in 2022, and we can see a direct correlation with the number of calls to our helpline as they do.

“Bills and inflation are on the rise but wages are not keeping up with those rises meaning there’s less and less money in a household budget each month.

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“The cost of home heating oil has doubled in less than a week. People are struggling to keep on top of things financially.”

Kevin Higgins, Advice NI Head of Policy said: “The unending, brutal spike in the cost of food, fuel and general cost of living has gone beyond crisis point.

“As the Utility Regulator, energy providers, retailers and the Bank of England all predict that the worst is yet to come, we look towards our Government - both local and national - to step up and support those most impacted, namely low income households both in and out of work.”

Advice is available for free and in confidence if you’re struggling via Advice NI Freephone helpline on 0800 915 4604 9am and 5pm Monday – Friday or see the website, www.adviceni.net/debt for details of advisers in the north west.

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Mr Higgins added: “Much, much more must be done; and it is unthinkable that the additional funding package recently announced by Treasury to support people with rising energy costs, with £300m ear-marked for Northern Ireland, not being used because of the lack of a functioning Executive.”

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