Government bites back on loan sharks
The government plans to allocate over £5.5m in extra cash to tackle loan sharks.
The money will be spent helping to investigate and prosecute illegal lenders, while supporting their victims. ‘At risk’ individuals will be encouraged to join a credit union, helping them access ‘safer’ forms of finance.
Loan sharks charge very high rates of interest and also provide little paperwork to confirm the arrangements they have made. They may also take illegal action to collect the money they have lent. The Treasury estimates that around 300,000 people are in debt to illegal money lenders in the UK.
John Glen, economic secretary to the Treasury, said: “(These people) need to know that we’re on their side. That’s why we’re taking the fight to the loan sharks and spending more than ever to support their victims.
“In total, £5.67m of funding will be provided to Britain’s Illegal Money Lending Teams (IMLT) and bodies in Northern Ireland to tackle illegal lending – a 16% increase compared to the previous year. The money will be used to investigate and prosecute illegal lenders, and to support those who have been the victim of a loan shark.”
Since the IMLT was established in England in 2004, it has made over 380 prosecutions, leading to 328 years’ worth of sentences, and has seen over £73m of illegal debt written off.
Tony Quigley, head of the England Illegal Money Lending Team, said: “Loan sharks are a blight on society and prey on vulnerable people who struggle to make ends meet. These criminals use callous methods to enforce repayment and victims are often subjected to threats, intimidation and violence. We will not tolerate this sort of criminal activity in our country and loan sharks who are caught flouting the law will be pursued and prosecuted.
“It is important for people to realise that alternatives to borrowing from loan sharks are available if you are in financial difficulty. Loan sharks are never the answer and we strongly support credit unions who can provide a safe and legal alternative.”
The government has set up a confidential hotline – 0300 555 2222.