I thought I was borrowing £100 from a friend – but I ended up homeless at Christmas after falling for a loan shark trap

STANDING at the school gate Michelle was approached by a friendly mum wanting to be mates - but by Christmas she was homeless after falling for a loan shark trap.

Mum-of-three Michelle, whose name we have changed to protect her identity, had recently moved to the area after escaping an abusive relationship.

Because of that, she was initially wary of new friends, but the friendly mum at the school gate was determined.

Soon they were meeting up regularly for a cup of tea and, thought Michelle, were close friends.

Michelle said: "Now I think they just spotted that I was a single mum and a loner.

"And by Christmas I couldn't even put up a tree for the kids or have a dining table to do them a Christmas dinner.

“I had a good job, I came from a good background, and I was still a victim. It could happen to anyone.

Hundreds of thousands of people are in debt to illegal money lenders in the UK, campaigners warn - and Christmas is the second most common reason for borrowing cash.

When Michelle was struggling to afford a birthday present for her son, her new friend offered to lend her some money.

“I’m not the sort of person to borrow money, but I had got to the point where I was really struggling," Michelle told The Sun.

“She was my friend and she wasn’t judging me, so I thought it wouldn’t do any harm.” 

Michelle knew her friend gave money to people and charged them interest - but she was promised there were no extra costs as they were mates.

Initially she borrowed £100 - but the next month, when Michelle was short again, she borrowed more money and this time there was interest to pay.

She borrowed £100 and agreed to pay back £250 - paying off £50 a fortnight until the debt was repaid.

That's equivalent to an interest rate of around 1,000 per cent. For comparison, the average interest rate on a £3,000 loan is currently less than 10 per cent.

When Michelle's hours were reduced at work, it got harder to pay back the cash: “She said I’d have to repay double what I’d borrowed at the end of the month, and then there was just no way out.

“Each month I had to borrow more to make up the shortfall.” 

The most she borrowed at one time was £350, and she repaid nearly £2,500. 

The loan shark even knew the date she got paid, so knew when to chase for the money.

I was embarrassed and ashamed

Soon the repayments had gotten out of control and Michelle told her friend she couldn’t afford the interest rate.

“That ‘s when it started to get nasty,” she said.

"There were a lot of threats - she said she knew people and she would use other people to threaten me.

"They would send me messages or throw things at my windows, shouting things at me outside the house."

Local youths threatened Michelle with violence, made threats to harm her family and smashed her windows.

Crooks from the gang broke into her home, burgled it and urinated over her children's bedrooms.

Michelle said: "It escalated quite quickly. What they didn't take, they destroyed.

“I was scared for my life and my children.”

Eventually, Michelle packed up the family's few remaining possessions and left. 

But she still received messages and public attacks on social media from the loan shark and the loan shark's associates.

They told mutual friends not to speak to Michelle because she couldn't pay her debts.