A credit union has joined forces with the England Illegal Money Lending Team (IMLT) to warn against the dangers of borrowing from loan sharks.
IMLT national mascot ‘Sid the Shark’ visited the Westcountry Savings and Loans Head Office in Portishead to talk about the perils of loan sharks and how to help drive them out of the region.
Westcountry is the South West’s largest credit union – a member-owned, not-for-profit savings and loans organisation where any profit generated is paid to savers as an annual dividend.
Credit unions aim to help people avoid high interest lenders by providing affordable loans, using funds deposited by other members who are saving.
Westcountry Savings and Loans has collection points at Kestrel Court, Portishead on Wednesdays (9.30am to 12.30pm) and in Salvation Army Hall, Clevedon on Fridays (9.30am to 11.30am).
Jackie Simpson, General Manager at Westcountry Savings and Loans said: “We are proud to be part of the solution to high cost credit and aim to help end the reign of terror loan sharks have inflicted across the South West.
“We know this time of year can be challenging for many of our members with back-to-school costs weighing heavy on their household budgets. Closely follow this with preparations for Christmas and it can mean families become reliant on short term credit.”
“As well as providing responsible loans at affordable rates, we’re pleased to offer our members the chance to benefit from the Stop Loan Sharks savings incentive. Simply open a new savings account and deposit £5 per month for 3 months and the Illegal Money Lending Team will add £25 to your account.”
The new scheme is being funded by the IMLT using proceeds of crime money confiscated from convicted loan sharks.
What is a loan shark?
Anyone lending money should have the correct permission from the
Financial Conduct Authority (FCA). Licensed lenders have to comply with legal obligations
in dealing with customers, including the use of proper paperwork and fair
This is not the case with loan sharks, who will often offer cash loans without paperwork, use benefit or bank cards as security, and threaten or use violence to get money.
If you can answer ‘yes’ to one or more of the following questions, then you may be borrowing from a loan shark:
Loan sharks can charge extortionate interest rates running to thousands of percent, making it impossible for victims to repay the loan.
According to statistics, an estimated 310,000 households are borrowing from illegal money lenders and the highest interest seen by a loan shark was equivalent to 4.5 million percent APR.
Nationally the Illegal Money Lending Team has secured more than 394 prosecutions for illegal money lending and related activity, leading to nearly 480 years’ worth of custodial sentences.
They have written off £74.9 million worth of illegal debt and helped over 29,000 people.
Despite success earlier this year with two notable convictions in Newton Abbot, there is still a job to do. Tony Quigley, Head of the IMLT explains “Loan sharks operate across all communities. These unscrupulous individuals target the vulnerable and make money persecuting those who can least afford it. As a society we need to protect those at risk and ensure illegal money lending is a thing of the past. Credit Unions are a huge part of the solution. By offering affordable, responsible loans they give people who need a little extra help from time to time, a safe and reliable option.”
Anyone affected by loan sharks can contact the team in confidence on 0300 555 2222 or visit report online.