An illegal money lender or Loan Shark as they are commonly known, is someone who lends money without having the authorisation from the Financial Conduct Authority (FCA) to do so. They come in all shapes, sizes, ages, ethnic groups, social backgrounds, and genders, and can include a friend of a friend, a neighbour, work colleague or someone who is part of an organised crime group. It is estimated by the England Illegal Money Lending Team that 1.08 million people are using a Loan Shark in England.
Some of the red flags to look out for include that there is generally no contract to sign, no proof of income required from the borrower and no receipts given for payment. Loan Sharks will lend to anyone, including children and take cash, goods or ‘in kind’ payments to repay the loan. New borrowers are found via ‘word of mouth’, a Loan Shark rarely advertises their business.
A Loan Shark will often start out friendly at the point of borrowing and convince the borrower they are doing them a favour. Unfortunately, when the borrower misses a payment, increased penalty charges, threats, intimidation, blackmail, and violence generally occur.
The borrowing may start out as a small amount, but soon rises. The Illegal Money Lending Team provide an example of a victim of a Loan Shark who originally borrowed £500 for household bills, three years later and after paying back a total of £18,000, the victim continued to owe the £500.
If you have, or someone you know informs you that they have borrowed money from a friend, ask yourself or them the following questions:
- Is their friend lending to anyone else?
- How are payments made?
- Does the lender take them to the cash point to withdraw their payment?
- Does the friend come round to the house to collect payment?
- Is the friend charging interest?
If the answer is yes to any of these, it is likely that the money is being borrowed from an illegal money lender.
Confidential help and support can be sought from the England Illegal Money Lending Team via telephoning 0300 555 2222, emailing reportloanshark@stoploansharks.gov.uk or live chat at www.stoploanshrks.co.uk (9am-5pm, Mon-Fri). Local councils and partners have a range of support in place for residents facing hardship and residents should contact their local Council in the first instance if they need help or Citizens Advice if they need debt advice.
Councillor Lee Dillon Chairman of the Joint Public Protection Committee said, ‘with Christmas fast approaching and the ‘cost of living crisis’ continuing to impact on finances, more people are having to borrow money to meet their basic financial demands such as housing, food, and utility bills. Loan Sharks prey on our most vulnerable in society, their actions of lending money are illegal and can cause both psychological and physical harm to their victims. I therefore urge any resident across the partnership who is or suspects a relative or friend to be borrowing money illegally, to contact the England Illegal Money Lending Team, and those who currently find themselves in financial hardship to contact their local Citizens Advice Service for confidential, free and impartial advice.’
For more information in respect of this press release please contact tsadvice@westberks.gov.uk tel 01635 519930
