Concern has been expressed about leaflets from a door-to-door money lending company, charging “extortionate” interest rates, delivered to homes in Donegal.
Paul Brogan, chairperson of Buncrana Credit Union, said the leaflets had been delivered through letterboxes in the town over the past weekend. Mr Brogan said: “We am unsure if it happened all over the peninsula but leaflets regarding door-to-door money lending were definitely delivered to homes in certain areas of Buncrana.
“We in Buncrana Credit Union would be concerned about these leaflets because door-to-door money lenders are charging extortionate interest rates and they are targeting the most vulnerable people in the Inishowen community. “Buncrana Credit Union does not want anyone in Inishowen under duress at this time of year, coming up to Christmas.
"We would ask anyone experiencing financial strain in the run up to Christmas to come to their local Credit Union first and we will do our best to help them, rather than go to the money lenders,” said Mr Brogan.
Mr Brogan said the ethos of the Credit Union was "people helping people."
He added: “Buncrana Credit Union next year enters it's 50th year servicing the local community and we were specifically set up for the community to access low interest credit from a not for profit organisation.
“I would describe the APR (Annual Percentage Rate) charged by the door-to-door money lenders as extortionate. The APR that these money lenders are quoting on this leaflet is an astonishing 187.2% APR.
“Also, if anyone finds themselves in difficulty with loan re-payments, the Credit Union sit with you and talk the situation through and come up with a solution. The door-to-door money lenders will not.
“They will pursue the payment, and if you miss re-payments, you will owe more and more money,” said Mr Brogan.
Mr Brogan said the Credit Union was a better option for borrowers.
He said: “Firstly, you will not have to pay as much money back as our APR is lower, and secondly, if you find yourself in difficulty, we will listen and we will come up with a plan that suits us both. The money lenders will not come up with a plan to help you. They will want their money and they will only add on more money to get their money back,” cautioned Mr Brogan.
He added: “Buncrana Credit Union is concerned the vulnerable in our community are being targeted to take out high interest loans for Christmas. People could end up paying these loans back over a long period of time if they run into difficulty.
“Unfortunately, we have seen people who have taken out loans in the past from money lenders and in the end come to us for help because they could not afford the re-payments
“The door-to-door money lenders make it seem like an attractive proposition. And the figures they quote do not mean a lot to vulnerable people who just want a loan. People can discover quite quickly that the repayments are too high, so they turn to the Credit Union for a loan to pay of the moneylender loan,” said Mr Brogan.
Mr Brogan said Buncrana Credit Union wanted to “cut this out and encourage anyone in this situation to come to your local Credit Union first.”
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