Added: Tanesia Beadle - Date: 17.11.2021 13:21 - Views: 21342 - Clicks: 9621
NOW THAT Irish loan sharks festive season is over, many of us are suffering the annual financial hangover of overdrawn bank s and maxed-out credit cards. A study commissioned in December by the Irish League of Credit Unions showed that over 50 per cent of Irish people would get themselves into debt over Christmas.
The research also found that it could take some people up to nine months to recover financially from the effects of Christmas overspending. However, for those who resorted to last-ditch sources of credit such as moneylenders, it could take a lot longer to escape the vicious cycle of punitive interest rates and mounting debt. As the recession encroaches on more and more sections of society, so too do regulated moneylenders, who are d by the Central Bank to charge interest rates ranging from 23 per cent to per cent.
However there are s that moneylenders are expanding their reach. Last year, the largest moneylender in the country, Provident Personal Credit, increased its Irish client base from 75, to 88, According to John-Mark McCafferty, head of social justice and policy at St Vincent de Paul, in the lead-up to Christmas there was anecdotal evidence of moneylenders dropping leaflets in what would have been considered middle-class estates in commuter towns on the outskirts of cities such as Dublin.
But, for borrowers who overstretch themselves and live in dread of the weekly knock on the door from the now not-quite-so-friendly collection agent, it can be a difficult situation from which to extricate themselves. Moneylenders are prohibited from charging a fee or penalty if a customer falls behind on their repayments.
Neither are they allowed to offer a top-up to pay off the first debt, which protects the borrower from falling further into debt. Paul Joyce of the Free Legal Aid Centres Flac says that regulated Irish loan sharks tend to be relatively tolerant of missed payments. Brendan Dempsey, Cork regional president of St Vincent de Paul, says the real problem lies not with regulated moneylenders but with und loan sharks who operate outside the law.
Not only does this make it difficult to escape their clutches, but the borrower never quite knows exactly how much they owe. Dempsey has also witnessed at first hand the intimidation tactics used on borrowers who fall behind on payments. In some instances St Vincent de Paul in Cork negotiates with moneylenders on behalf of borrowers, and buys out their debt. On one such occasion, Dempsey waited with a young mother who was expecting a call from a loan shark whom she could not repay. So what, if anything, can be done to protect borrowers from unscrupulous, unregulated lenders?
He has yet to meet anyone willing to take this step. Meanwhile, as mainstream credit lines such as personal loans from banks continue to dry up, new sources of non-standard loans are cropping up and with them come fresh problems. When contacted by Pricewatch, a representative of Cash Connectors said if a customer has an issue, they are always willing to work with them. According to the National Consumer Agency, the body responsible for regulating pawnbrokers, Cash Connectors did not have a pawnbroking licence in when the transaction outlined above took place although a business at the same address has successfully applied for one this yearand therefore it would not have come under their remit.
The similarly-named Cash Converters franchise, which has stores in Dublin, Galway and Navan, offer buy-back loans. As with Cash Connectors which is unconnected with the Cash Converters chainthey are not classified as pawnbrokers.
Neither are they d as moneylenders. Kit Sadgrove, manager of the Irish Cash Converters franchise, says that the stores comply with all relevant consumer protection legislation. However as the Cash Connectors case shows, buy-back loans can turn out to be an extremely costly way of accessing short-term credit. Rather than putting valuables on the line for prohibitively expensive loans, cash-strapped consumers would be better advised to pay a trip to their local credit union where they may be able to access affordable, transparent personal loans at interest rates of between 8 and 10 per cent — even if they are not a member.
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