Many of us will struggle with finances at some point in our lives and for some people when times are tough they feel they have no option but to borrow from loan sharks. It is estimated that 310,000 households in the UK are borrowing from these lenders who are unauthorised, often charge extortionate rates and may resort to violence, threats and intimidation to enforce their loans.
The Illegal Money Lending Team (IMLT) is the agency that prosecutes loan sharks and supports people affected by this crime. They have worked to support grandparents who have been worried about family members who have been trapped by loan sharks.
Often the person who introduces the loan shark is seen as a trusted friend or even family member. One such case was that of Doris and Bob, who are both pensioners living on disability living allowance benefits. They were paying their “family friend” £250 a week to pay off an £18,000 loan which they were led to believe was borrowed on their behalf from the bank.
However, the borrowed sum increased from £18,000 to £23,000 then £32,000, which the loan shark told them was interest added from the bank. The payments amounted to £1,000 a month which meant that Doris and Bob were unable to enjoy the luxuries which they should be enjoying at that stage of their lives, approaching their Ruby wedding anniversary.
Doris eventually decided to call the IMLT, when the stress of the loan shark put a strain on their marriage, leading to her and her husband constantly bickering. She was surprised to discover that IMLT offered free advice, and after investigation found that Doris and Bob had paid the loan shark £27,000 over two years. There was no bank loan.
The IMLT visited the loan shark and informed him of the offence that he was committing, and that the debt collecting must stop. Doris and Bob, now enjoy a fuller enriched stable life, with the support of the IMLT present for as long as they require it.
Loan sharks will rarely offer paperwork so borrowers are unsure about the terms of the agreement and how much is owing. The rates of interest can also be extortionate, as high as 131,000% has been identified in the past and often borrowers will struggle to repay the debt as the lender will add additional sums onto the outstanding amount. Some loan sharks will also resort to taking items from the victim’s home as security, including items such as passports and bank cards. Or, they may even turn to making threats and physical violence in an attempt to reclaim debts.
Nationally the IMLT has secured 310 prosecutions for illegal money lending and related activity, leading to nearly 200 years’ worth of custodial sentences. They have written off almost £59 million worth of illegal debt and helped over 24,500 victims.
Loan sharks will often appear very friendly in the first instance but should never be used under any circumstances.
If you would to report an unauthorised lender or would simply like some advice, speak to us in confidence.
To report a loan shark:
Call the 24/7 confidential hotline 0300 555 2222
Text ‘loan shark + your message’ to 60003
Private message us at www.facebook.com/stoploansharks