Unlicensed lenders or loan sharks, make their living by targeting some of the most vulnerable people in our communities. While the plights of poor families and the elderly are well documented in this regard, the same cannot be said for care leavers.
Each year approximately 10,000 16-18 year olds leave the care system in England. While local authorities must still support care leavers until they’re 21, or 25 if they’re in training, the reality is that young people often start living independently before their 18th birthday. With little experience of living alone, managing money or taking responsibility for their own decisions, care leavers can be particularly vulnerable to unlicensed lenders.
It’s important to remember that young people in care have often experienced difficult lives already and yet start living independently much earlier than their peers. While 50% of young people still live with their parents at the age of 22, most care leavers have already had years of independence they weren’t necessarily ready for. This situation can be compounded further by the long-standing emotional wellbeing and mental health issues experienced by many as a result of childhood experiences of neglect or abuse.
The cumulative effect of these emotional, mental, social and financial challenges should not be overlooked, particularly as care leavers typically go on to have poorer social outcomes later in life. Over the years research has shown that 25% of homeless people have been in care during their childhood, care leavers are four times more likely to commit suicide in adulthood and more than a fifth of female care leavers become teenage mothers. It is this plethora of vulnerabilities that leaves young care leavers so open to exploitation by loan sharks.
Loan sharks choose to keep their lenders in the dark about the size of the debt and when it will be paid, charge extortionate rates of interest, add money to debts without explanation and often resort to violence and intimidation to ensure monies are paid. It can quickly spiral out of control and lenders can find themselves with long-term, ever-increasing debts they just cannot pay.
One of the real risks for care leavers is that loan sharks often present themselves as a community service or as a friend, in order to build trust. Intended to have people in their debt quickly, loan sharks know that young people without a support system or any experience of managing money, paying bills or planning ahead, are the most vulnerable of all.
It’s this which led NYAS to work with the Developing Youth Practice team, a social enterprise with specialist experience in providing financial capability training for young people. Equipping young people with the life skills they need to manage money and plan ahead, and educating them about the risks of loan sharks and short-term lending is an incredibly important part of addressing this safeguarding issue. With the help of a grant from the Stop Loan Sharks Fund, which is part of the England Illegal Money Lending Team, we’ve been able to take this one step further and provide a more rounded approach to this issue. With their funds, we now provide additional training for the staff and volunteer independent visitors (IVs) who work closely with children and young people in care and care-leaver. This training helps IVs to identify particularly vulnerable young people, alert them to the risks of illegal money lending and loan sharks and educate them about how to handle money and stay safe.
This approach relies on the trust that IVs have established with their young people. Often the only consistent, non-paid person in a young person’s life, IVs provide a stable and trustworthy role model and someone to have fun with and be mentored by. With this in mind they are very well placed to nurture young people in a friendly, familiar and non-judgemental way, helping to prepare them for a more independent future and providing the emotional guidance they need to thrive.
Tony is one of NYAS’s IVs and he has been matched with several young people over the years. He knows the positon of trust he is in and the importance of helping young people to prepare for adulthood. He said: “As each of the boys I’ve been matched with approached 18 years old, they faced the challenges that all teenagers face, but as a care leaver they really value having an adult that they trust to talk to, bounce ideas off and get a real-world perspective on things. The most rewarding part of being an Independent visitor is seeing a young person become a young adult and knowing you have helped them grow in confidence, expanded their experiences and broadened their horizons.”
Improving outcomes for care leavers requires the same level of care, support, and guidance that you would expect from a reasonable parent, before leaving home. There must be the correct emotional and financial guidance in place to successfully transition care leavers into adulthood and to minimise the all too common issues relating to unemployment, social exclusion, crime and financial difficulties.
It’s easy to see why loan sharks would target care leavers and perhaps more importantly, why care leavers might be tempted to turn to them for ‘help’ as they go it alone. Loan sharks and illegal money lending present safeguarding issues for children and young people and for organisations and individuals working with children in care and care leavers, it is our duty to equip them for the challenges ahead. Ask yourself, would you and your colleagues know how to spot a young person at risk of a loan shark?
Training and education is almost certainly the answer and we are confident that by investing in our IVs and educating young people directly, we can go some way to improve the financial and social futures of the children and young people we support. To find out more about NYAS’ work in this area or to enquire about becoming an independent visitor visit www.nyas.net/services/independent-visitors/ and to discover more about the Stop Loan Sharks Campaign visit: www.stoploansharks.co.uk
