Loan sharks 'costing Britons dearly'

Illegal lending is rife in the UK, with more than 100,000 households having borrowed from loan sharks over the Christmas period.

That is the finding of a report produced by Circle Anglia and the Financial Inclusion Centre, which highlighted the costs of such finance.

An estimated total of £29 million was taken out in an illegal manner, according to the study, with excessively high interest rates meaning the total bill will be more than £80 million.

Faisal Rahman of Debt on our Doorstep - a campaign to end irresponsible and extortionate lending - suggested that much of the money was used to buy basic items such as washing machines and Christmas presents.

Loan sharks are filling the gap because banks have pulled out of providing finance to individuals in some cases, he said, adding: "Many of the traditional lenders that people might have gone to, even if they are not mainstream ... are not lending to people anymore."

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