Case study 1:
When 91-year-old Joe asked his local credit union for a loan to ‘pay his mate back’ alarm bells started ringing for staff.
Why was someone in Joe’s position being pressured to pay back money? Who exactly was the friend that had lent him cash?
When it was discovered that he had also gone to the local Citizens Advice to ask for help as well, it became obvious that he was in trouble.
Staff asked the right questions and pointed Joe in the direction of Stop Loan Sharks, or the England Illegal Money Lending Team.
The specialist staff there quickly established that Joe had borrowed from someone who was not legally authorised to do so by the Financial Conduct Authority – a loan shark.
Joe, who is mentally and physically fit for his age, revealed that he knew the loan shark through selling jewellery and had classed him as a friend.
He had been borrowing money from this ‘friend’ since 2013 and is debt had grown to over £6,000.
The loan shark was demanding repayments of £600 a month and Joe had simply run out of money and needed to borrow elsewhere to pay.
When many people think of a loan shark, they often picture an intimidating gangster-type, usually male and between 20 and 40 years of age. Similarly, borrowers are often thought of as young, out of work, maybe a single parent.
But in many cases those images, of both the lender and the borrower, couldn’t be further from the truth.
In 2022, 22 per cent of those supported by the England Illegal Money Lending Team, or Stop Loan Sharks, were over the age of 55. Joe was the oldest borrower at 91.
Loan sharks can also be older. This year, two illegal lenders from London were ordered to pay £1.2 million in a Proceeds of Crime confiscation hearing. They were both women, aged 67 and 71. A man who was prosecuted in Bristol was aged 78 and the Stop Loan Sharks Wales Team had a case involving an 83-year-old woman, dubbed Britain’s oldest loan shark.
Loan sharks come from all sections of society and from all age groups. The only thing that unites them all is that they will strike wherever and whenever someone is vulnerable. Like Joe, many start by borrowing a small amount, but and once they have a grip on someone, the loan shark will do whatever they can to make sure they keep that hold.
Case study 2:
Doris and Bob were both pensioners in their 70s, living on disability living allowance benefits.
They were struggling to pay some bills and other debts and borrowed in total £18,000 from the loan shark, whose family they had known for many years. They thought the lender was helping them and said they would pay back £250 a week.
But they were never given any paperwork and the loan kept going up, until it doubled to £32,000.
Doris went to the post office every Monday morning and drew out £250 per week out of their benefits to pay the loan shark, but still they never seemed to make a dent in what they owed.
Eventually they sought debt advice and, again, a frontline worker spotted the signs and put them in touch with Stop Loan Sharks.
The team worked out that they had paid the loan shark £27,000 from their benefits over a two-year period.
The Stop Loan Sharks team is made up of two sections – investigators who look into reports of loan sharks and gather evidence to support a prosecution, and Liaise officers who work with borrowers like Joe, Doris and Bob and support them through the journey back to financial freedom.
In both cases, the Liaise officers were able to support these borrowers through their journey back to financial freedom, while investigators ensure the loan sharks were dealt with.
While Joe was adamant that he did want to pay the money back, he was told that he didn’t have to. He is now debt free.
Doris bravely decided that she wanted to make a stand as she realised she would never be free of the loan shark if she didn’t.
She and Bob are now also debt free and looking forward to celebrating their ruby wedding anniversary without the threat of a loan shark over their shoulder.
Dave Benbow, acting head of the England Illegal Money Lending Team, said: “The borrowers in these cases should have been living peacefully and enjoying their retirement. Instead they were living under a cloud of stress and intimidation from these illegal lenders who were thinking of nothing except lining their own pockets.
“Illegal money lenders come in all shapes and sizes and from all age groups. They prey on people wherever they are vulnerable and pretend to be friendly, offering a favour of lending some-much-needed cash.
“In truth they are leeches, taking advantage of others to fund their own lifestyle and ruining other people’s lives in the process.
“If anyone thinks they are in this situation, they should feel no shame or blame – they have done nothing wrong. They can contact our team in complete confidence and we will do whatever we can to help them and bring these lenders to justice.”
The warning signs of an illegal lender include:
- Giving you no paperwork or agreement on a loan
- Refusing to give you information about the loan
- Keeping items until the debt is paid such as your bank card or passport
- Taking things from you if you don’t pay on time
- Adding more interest or charges so the debt never goes down
- Pretending to be a friend at first, but then using intimidation or violence if you don’t pay
Many illegal money lenders are well known within their communities and are often introduced to borrowers through friends or family members. They are unregulated and give loans with no paperwork, charging extortionate interest rates. They often resort to threats, intimidation and even violence if repayments are not made.
Unauthorised lending is problematic as lenders do not complete affordability checks on borrowers – often meaning they are lending to people who cannot pay them back. These borrowers do not have the protection of consumer law such as cancellation periods and the ability to apply for help if they can’t pay. This causes huge amounts of stress and can impact their other finances – leaving them unable to pay rent or other priority bills.
This year marks the 20th anniversary of the IMLT. Over the past 20 years, the team has made 850 arrests and secured 424 successful prosecutions, with illegal lenders locked up for more than 606 years. More than £91.3 million in illegal debt has been written off, and around 32,000 borrowers have been supported.
Anyone who has been affected by illegal money lending should call the Stop Loan Sharks 24/7 Helpline on 0300 555 2222 or access support online at www.stoploansharks.co.uk. Live Chat is available on the website from 9am to 5pm, Monday to Friday.
