A government ‘crackdown’ on illegal lenders who are thought to be targeting vulnerable people is set to be stepped up.
£5.5m has been set aside to fund investigations and prosecutions of those deemed to be “nasty lenders” and “lowlife crooks” by the Treasury. The money will also be used to fund support for the victims of these illegal lenders.
In the UK, it is believed that as many as 300,000 individuals are currently in debt to illegal lenders. £100,000 has already been seized from these ‘loan sharks’ and this will also be put towards funding support for those who have fallen victim.
Economic Secretary to the Treasury, John Glen, said “These nasty lenders are nothing more than lowlife crooks taking hard-earned cash from the pockets of the most vulnerable.”
The funding is set to be passed over to the official Illegal Money Lending Teams, who will then use it to both investigate and prosecute those illegally lending money to the public. Some funds will also be set aside and used to encourage people who are believed to be at risk of loan shark targeting to become a member of a credit union, which will provide them with guidance to safer forms of finance.
Head of the England Illegal Money Lending Team, Tom Quigley, 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.”
StepChange Debt Charity’s Peter Tutton said that the cracking down on these illegal loan sharks was a welcome step. He added, “But it needs to be accompanied by a twin-track focus on the high cost credit market more generally, to reduce the harm being experienced by vast numbers of households who are forced to borrow to make ends meet.”
He said, “Now is the time for the government to explore creative, sustainable alternatives to meet the needs of financially vulnerable households.”
Chief Executive of Christians Against Poverty, Matt Barlow said, “Many who borrow from a ‘loan shark’ don’t realise that’s what they’ve done. Often, it will feel like borrowing from a friend of a friend until the reality of that arrangement begins to hit home. Therefore, the shame added to threats of violence, can be a significant hurdle to reporting it and getting help. Hopefully. This extra funding will result in greater awareness as well as increased prosecutions.”
Anyone who believes they have been victim to illegal money lending can contact the Illegal Money Lending Team’s confidential hotline: 0300 555 2222.