Over the last year we have received an increase in reports of unlicensed money lenders using social media platforms. To increase our understanding, we commissioned Wordnerds to research online money lending in Wales.
The report found that a growing number of Welsh citizens are using Reddit to look for loans from other users to make ends meet.
Most loans are for small amounts of money but worryingly, the money is needed for life essentials such as food and rent. The majority of loan requests were either from students who were waiting for their student loan payment, or people in receipt of benefits.
The report suggests that the pandemic seemed to be worsening the situation for people struggling to make ends meet. Loan requests from Welsh borrowers mentioning the pandemic, lockdown or furlough, are far more frequent that borrowers from Scotland or Northern Ireland.
The most shocking finding was that less that nearly a third (31%) of lenders to Welsh borrows either had no track record of lending or were subsequently banned from reddit due to account violations. The report also suggested that nearly a half of lenders could be based outside of the UK.
The worry for WIMLU is that this type of lending is completely unregulated and open to abuse. There have been reports of lenders asking for collateral in the shape of private information in the form of passwords or in more extreme cases nude photographs.
The number of loans is relatively low, but we don’t want to ignore this emerging trend. Sadly, we know that people who are struggling to make ends meet can easily fall prey to loan sharks.
We would like to speak to anyone who has taken out a loan via reddit, or any other form of social media platform, whether their experiences be good or bad.
Nobody would be in any trouble for taking out a loan via social media, we simply want to get a better understanding of individual experiences so we can protect and help those who are at risk.
WIMLU can be contacted for a confidential chat on 0300 123 3311 or tell us about it.
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