Borrowers may be in more danger of becoming victims of loan sharks

Shropshire’s not-for-profit savings and loans co-operative Just Credit Union today issued the warning following the demise of Morses Club.

The high-cost lender, which often served many families struggling to access mainstream lending, along with its brands Dot Dot Loans and Shelby Finance, has gone into administration.

Steve Barras, Just Credit Union Development Officer, said today: “While expensive when compared with loans from mainstream banks, Morses was at least a regulated lender and provided a legal route for many families unable to access mainstream credit.

“There is also still a need for people to borrow small amounts over a short period -something most banks don’t want to offer. The danger, however, is that individuals needing a small loan, or with a poor credit rating, fall victim of money lenders.”

He said that Just Credit Union, as a community based responsible lender, may be able to offer a fair loan even to those who have a less than perfect credit score.

They have the best interests of their members at heart and won’t lend unless they think the loan is affordable and will make a decision that is right for the borrower based on their ability to repay now rather than credit history alone.

Steve said: “It is possible that some Morses Club employees may continue to lend to their existing contacts with some customers being unaware that this is no longer a safe way to borrow.

“This is what happened when Provident, another doorstep lender, left the market in 2021. Some agents continued to lend and collect from customers with many borrowers unaware they had no protection anymore.”

Just Credit Union has warned that with a reduced supply of regulated small loans, or loans to people with weak credit scores, illegal lenders are stepping in to fill the gap and often people didn’t realise they were borrowing from a loan shark, often initially thinking they were borrowing from a friend or a legitimate lender.

Steve added: “Having access to credit in challenging financial times is part of someone’s financial resilience and knowing the likely options can be a big relief. Just Credit Union is owned by its members and run for their mutual benefit rather than corporate profit.

“It provides anyone who lives or works in Shropshire or Telford and Wrekin with access to safe and fair financial products. People need to ensure they are dealing with a reputable regulated organisation.”

People can find out more about Just Credit Union via their website justcreditunion.org and there is help and support available for anyone borrowing from an illegal lender at stoploansharks.co.uk