Consumers fall into debt traps as illegal lenders exploit people in 'credit deserts'

ITV News has heard how some of the poorest and most vulnerable communities are being targeted by loan sharks. Our Wales Reporter, Rhys Williams, reports in one of the country's so-called 'credit deserts'.


When Julie Andrews took out a £200 payday loan just to get through Christmas, it led to more than a twenty-year spiral into £28,000 worth of debt. The care worker lived in constant fear of bailiffs and tried to take her own life.

Julie lives in Port Talbot, an area identified by a report shared exclusively with ITV News as a “credit desert". Credit deserts are communities where people's credit ratings are so poor that things like loans and mobile phone contracts have higher interest rates and are therefore more expensive.

People in this situation then often have to pay over the odds for their gas and electricity and have to turn to high-cost lenders, compounding their problems.

Julie has spent the last 20-years spiralling into £28,000 worth of debt after taking out a payday loan. Credit: ITV News

As the think tank Demos says in their report, the lowest credit index scores are often found in the most deprived areas of the UK. This means people in these communities face further inequality just for living there. Although this report shows the areas scoring lowest are typically in the north of England and the South Wales Valleys, Demos says it shows an “incredibly fractured United Kingdom.” This is because there is a “very strong need for good credit in certain areas of London and the south coast,” with Wales and Northern Ireland scoring badly more generally. The picture in Scotland is more variable, with some pockets of good access to credit, but there are very few areas with low need.

Demos says that in areas scoring badly, payday lenders and illegal loan sharks are often more prevalent. In Julie in Port Talbot’s case, she was repeatedly bombarded with advertisements for loans with huge interest rates.

In the case of illegal lenders, experts say these individuals are often well-known and even respected in their local communities as a source of cash, but their intentions are far from benevolent and their methods can be extreme.

Ryan Evans from Stop Loan Sharks Wales (SLSW) says illegal lenders are incredibly difficult to catch as victims are terrified into silence. He says they will often target people with learning difficulties, and can even use physical and sexual abuse.


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Julie managed to escape her debt trap after stumbling across the charity Christians Against Poverty while looking for advice on Martin Lewis’s money saving website. Now debt free, she is urging anyone in a similar position to seek help.

Stop Loan Sharks Wales say that anyone worried about illegal money lending can call them on 0300 123 3311 for confidential advice and support.

You can read Demos’ report in full here.

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It is the UK’s leading charity fighting for children and young people's mental health, and wants to make sure all young people can get the mental health support they need, when they need it

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