Young people across the UK are at risk of falling victim to loan sharks amid the cost-of-living crisis as they struggle to get credit and are forced to borrow elsewhere to make ends meet.
But a new grime music video has been launched this week to help steer them away from falling into the debt trap and being left at the mercy of illegal lenders. Instead, it highlights the work of credit unions and spells out how they are a safe and sustainable way to borrow and save.
Money recovered from loan sharks across the UK has paid for the video, which has been produced by Nourish Social in partnership with the England Illegal Money Lending Team (IMLT) and the Association of British Credit Unions Limited (ABCUL). The video tells the story of Amy, who falls into debt after a relationship breakdown, but finds a way out with the help of a credit union.
Tony Quigley, head of the IMLT, which investigates and prosecutes illegal lenders across the UK, said:
“We know young people are particularly financially vulnerable in the current economic climate and many illegal lenders are starting to take advantage of this, targeting victims through online platforms and social media.
“They pose as a friendly face, offering to take instalments as payments for goods sold online and then move on to offering small loans. It can seem as though they are doing a favour, but things can very quickly turn nasty, as they demand repayments with extortionate interest rates and use threats, intimidation, and violence to extract money.
“These young people may feel that they are trapped with no way out. But there is an alternative. Credit unions offer a safe and sustainable way to borrow and to save money. This video really gets this message across to young people and we hope it can help steer them away from these unscrupulous criminals and towards a safe way of borrowing.
“Using money that has been seized from illegal money lenders to pay for this video to be put together seemed an extremely fitting way of using that cash.”
Theo Thompson, content creation strategist at Nourish Social, which works with brands and organisations on social media storytelling, said:
“Crafting this video advert was more than just a project; it was a passion to shift perceptions and light the way for young individuals striving for financial stability.
“It’s our hope that this unique blend of storytelling not only educates but deeply resonates with young audiences, showing them the promising pathways credit unions provide. Thank you to the IMLT for being innovative in their approach to help young people.”
Robert Kelly, CEO of ABCUL, added:
“Thanks to the Illegal Money Lending Team and Nourish Social for raising awareness of the benefits younger people can have by joining their local credit union.
“Credit unions are changing fast. Many are embracing digital transformation and on-demand customer service which is attracting younger members. Credit unions offer members the safety net of access to fair affordable credit from local organisations that have their interests at heart whilst helping them build financial resilience through savings, however small.”
A credit union is a financial co-operative which provides savings, affordable loans and a range of services to its members. It is owned and controlled by the members, so the emphasis is on providing the best service – not maximising profits.
There are 246 credit unions across England, Scotland and Wales, used by over 1.44 million people, including over 100,000 junior depositors. Membership of credit unions is growing. From September 2021 to September 2022, the sector saw membership rise by 2.2%; loans rose by 19.4% and deposits by 8%.
Between 2014 and 2022, the sector increased in membership and loans by 20% and 67% and there were increases in deposits and assets by 84% and 81%.
A recent Financial Lives survey from the Financial Conduct Authority, showed that 68% of 18 to 24-year-olds stopped saving or investing in the six months to January 2023, compared to 56% of all UK adults. It also revealed that 19% of 18 to 24 year olds had financial services or products refused, compared to 15% of all UK adults between 2020 and 2022.
Just under 9% of UK adults had borrowed from family or friends in 2022 to make ends meet, but that figure rose to 15% when it came to those aged between 18 and 34.
The Centre for Social Justice estimates that around 1.08 million people are borrowing from loan sharks in the UK. Since its launch, the IMLT has supported over 31,000 people and written off over £91 million worth of illegal debt, securing over 410 prosecutions for illegal money lending.
Anyone who has been affected by illegal money lending should call the Stop Loan Sharks 24/7 Helpline on 0300 555 2222 or access support online at www.stoploansharks.co.uk. Live Chat is available on the website from 9am to 5pm, Monday to Friday.