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You and your money
"Don't pay money up front to find a loan" is a message that Hull & East Yorkshire Credit Union is eager to get out to people in Hull.
The staff and volunteers who run the city's biggest financial co-operative have been horrified to hear of people paying up to £50 to firms called loan brokers that offer to find them loans.
"What some people have actually been paying for," explains Credit Union secretary John Smith, "is a letter with our contact details on."
"Anybody living or working in Hull can apply for a Credit Union loan without ever paying any money over to anyone," adds Mr Smith.
"They can call into our office, phone 318518 or visit our website.
"People who pay money to these brokers are no more likely to get a loan than anyone else.
The fee that these brokers charge is often higher than the total interest we charge.
"Someone borrowing £500 over six months would pay much less than £50 in interest, and we don't receive a penny from the brokers.
We charge a one-off £4 to people joining our Credit Union but only when their loan has been approved."
Besides charging exorbitant fees, some brokers are giving out misleading or even inaccurate information.
For example, giving the impression a loan has already been approved, or failing to check if the applicant would be eligible.
Sometimes they direct the applicant to a premium rate phone line or ask for further up front 'administration charges.'
"It is scandalous that these firms are cashing in on people seeking credit in these difficult times.
No one should have to pay to get information that is publicly available," said Mr Smith.
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