Don’t let a loan shark ruin your Christmas

By on 02/12/2011 in News

The Consumer Minister Edward Davey, on behalf of the Department of Business, Innovation and Skills and the England Illegal Money Lending Team are issuing to a warning to any Birmingham residents considering turning to a loan shark this Christmas, amid fears that people could be repaying their illegal loan well into the New Year and beyond.

Loan sharks are operating illegally. As their debts aren't enforceable in law many will resort to bully tactics such as violence, threats and intimidation.

The figures show that an estimated 310,000 households turned to an illegal money lender this year, with 20% of victims originally taking out the loan to fund the festive season.

A single mum contacted the Illegal Money Lending Team, which is hosted by Birmingham City Council after she took out a £150 loan for Christmas a number of years ago believing it would be repaid within a few months. The loan shark harassed her for five years, attempting to break into her home and take items. Despite her regular payments he added additional arbitrary amounts, never letting the outstanding balance decrease. When he was arrested, the lady had repaid in excess of £5000.

 She said “There was nowhere to go. I wasn't even safe in my own house. I was screaming, crying, pleading with him not take my stuff. To think, that my little girl had to see that.  When he was arrested, it was such a weight of my shoulders. It had got to the point where my nerves were shot and I was too frightened to answer the door. I'd realised he was never ever going to go away. If he hadn't been arrested I'd probably still be paying him now.”

The Team are warning people to avoid all illegal money lenders at all costs. How would you know if you were in debt to a loan shark?

  • Most illegal money lenders are originally friends with their victims or know them through friends of friends. They will usually appear to be helping out the borrower but once people are unable to pay, their behaviour often changes.

 

  • Illegal money lenders very rarely offer paperwork, keeping the borrowers in the dark as to how much they are actually paying.

 

  • Illegal money lenders are motivated by their own greed and most will add extra charges or interest payments until the borrower is trapped in a never ending spiral of debt. The highest interest seen is a staggering 131,000% APR.

 

  • Illegal money lenders gain control over their victims and their finances. In some recent cases the loan shark has took hold of the victim's bank or post office cards along with the PIN's in order to withdraw directly from their accounts leaving them with little or nothing to get by on.

 

Consumer Affairs Minister, Edward Davey said “Pure and simply, loan sharks are criminals who prey on vulnerable communities and fleece their victims out of hard earned cash, often through intimidation and violence.

“ This will not be tolerated, which is why Government is continuing to fund the important work the Illegal Money Lending Teams are doing up and down the country to bring these crooks to justice. Not only have the teams successfully prosecuted nearly 200 illegal lenders and written off close to £40million in victims' debts, they also offer advice and support, so I would encourage anyone in financial difficulty with a loan to call the confidential hotline. And to those who might be considering taking out an illegal loan in the run up to Christmas, I urge you- don't do it.”

Councillor Neil Eustace, Birmingham' Chair of the Public Protection Committee said “Illegal money lending is a crime that will not be tolerated in our City. These lenders are not offering a community service and should always be avoided. We will continue to work with the England Illegal Money Lending Team to clamp down on this problem and would urge anyone who has fallen prey to loan sharks to report them in confidence, as help is available.”

Tony Quigley Head of the England Illegal Money Lending Team said “This is a despicable crime that will not be tolerated. As Christmas approaches we would like to make especially clear that no matter how desperate you are these criminals should always be avoided as they will make your life a misery. If you believe you or someone you know is involved with a loan shark please call our team in confidence on 0300 555 2222. Our lines our open 24/7 even throughout the festive period. If we can stop just one person from turning to a loan shark this Christmas we have made a difference.”

Across the Stop Loan Sharks Project more than 190 prosecutions have been secured leading to more than 117 years worth of custodial sentences. Almost £40 million worth of illegal debt has been written off and over 16,000 victims have been helped.

To report a loan shark:

Call the 24/7 confidential hotline 0300 555 2222

Text 'loan shark + your message' to 60003

E-mail reportaloanshark@stoploansharks.gov.uk

Log-on to www.direct.gov.uk/stoploansharks

Find us on Facebook www.facebook.com/stoploansharksproject

Ends

Note to editors:

Funded by the Department of Business Innovation and Skills, the Stop Loan Sharks Project consists of three Illegal money lending teams; England, Scotland and Wales. Working in partnership with local Trading Standards Authorities up and down the country, the England Team consists of specialist officers who investigate and prosecute illegal money lending and related activity and LIAISE officers who support victims and raise awareness of the dangers of borrowing from illegal money lenders. The project piloted in 2004, and has expanded. So far the project has secured more than 190 prosecutions leading to custodial sentences in excess of 117 years.

Sarah-Jane Lynch - Communications Officer

Illegal Money Lending Team - Trading Standards

Telephone: 0121 693 1030 or 07881617119

E-mail:  sarah-jayne.lynch@birmingham.gov.uk

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