Northumberland Community Bank issues warning over illegal and predatory lenders

The costs associated with Christmas, as well as the cost of living crisis, could see vulnerable people fall victim to their activities, which the organisation says will only escalate financial problems.

The member-owned financial cooperative wants to combat this problem by being a sustainable source of lending for individuals and small businesses, as well as a safe home for savings.

Scott Wilson-Laing, chief executive officer of Northumberland Community Bank, said: “The festive season is upon us, which is a time of uncertainty for many people.

“It can tempt people to get embroiled with high interest lenders, and the team works closely with the community to support so many to avoid these traps.

“Last year Northumberland Community Bank lent over £1.1m in small loans, typically less than £1000, and we charged our members a total of about £150,000 interest.

“These are often financially vulnerable people, with marginal credit scores, who are at real risk from less scrupulous lenders.

“In comparison a legal but high-cost lender would charge around two to three hundred percent, or £1.5m in interest, with a loan shark having rates of up to 1000% or more, extorting up to £5m for the same loans.”

The bank is looking to build on its track record to expand across the North East.

Scott said: “Northumberland Community Bank provides a flexible, personalised service with no early repayment penalties and a willingness to work with our members to overcome short term problems, all while charging a fraction of the cost of other lenders.”