Promoting Financial Inclusion and tackling Vulnerability are core values at AperiData that we share with our clients in the Credit Union sector. Financial exclusion is driven by many factors, from poor credit history, irregular working patterns, regular house moves to sheer bad luck. Being financially excluded removes opportunity for Consumers to benefit from financial services in the same way as the non-financially excluded. Reduced choices often result in these, often vulnerable Consumers paying more for financial products. The cost of living crisis that has been unfolding in the UK over recent years only serves to place more people in financial exclusion.
Loan sharks are criminals who prey on any vulnerability they can find, including a financial one. Fair4All reported in 2024 that almost 1 in 12 UK adults have turned to Illegal Lenders over the past 3 years and that 7% of adults (3.3 million people) have used or believe someone in their household has used, Illegal Lending since 2021.
Illegal Money Lending can have many negative consequences for victims and their families. Illegal Money Lenders will often use harassment or threaten violence against people using their services. Interest rates and fees charged can also be extortionate, driving Consumers into further hardship and helping the perpetuate the cycle.
The Credit Union sector in the UK are often able to help their members access affordable finance options, even the financially excluded. This can provide a bulwark against Illegal Money Lenders in the communities they serve. Operating in this space places Credit Unions in a position, where they are supporting vulnerable Consumers with fairer products as well as making individual lending decisions by reviewing a Consumers individual situation. This places them in a unique position to identify Illegal Money Lending and see the effects it can have on individuals and their families.
We are proud to announce the launch of a new pilot programme that we will be running with a number of our Credit Union clients over the next few months, supported by the Illegal Money Lending Team at stoploansharks.co.uk. This pilot will aim to provide Credit Union staff with the tools they need to better identify Illegal Money Lending using Open Banking through our Credit Console and to monitor reporting of these. We will closely follow this pilot as it progresses and take any lessons learned forward into our Credit Console product development before rolling out on a wider basis.
We will be training Credit Union staff through July 2024, initially at Unify Credit Union and Hull and East Yorkshire Credit Union. Lisa Warburton at Unify is quoted: “At Unify we are happy to be working with Stop The Loan Sharks and AperiData to help raise awareness of unregulated borrowing in the Credit Union Sector”
We thank the Credit Unions for supporting this pilot and also the Illegal Money Lending Team for their valuable insight into the ways this illegal lending can be identified. We hope this pilot can help us demonstrate our commitment to our core values around Promoting Financial Inclusion and tackling Vulnerability.
About AperiData
Harnessing the power of Open Banking, AperiData is laser-focussed on facilitating instant, accurate and fair outcomes for consumers and financial institutions. With a tech stack 100% owned, AperiData is double badged as an FCA and CRA-authorised Open Banking provider and challenger Credit Reference Agency.
The company is on a mission to improve financial inclusion by revolutionising lending and credit scoring. Backed by risk practitioners turned serial entrepreneurs with more than 150 years of experience in global credit risk and data analytics, AperiData’s real-time consumer risk insights empower organisations to serve their customers digitally and work to improve life outcomes.
To learn more about AperiData, visit: https://www.aperidata.com/
