Tackling loan sharks
Illegal money lending, or loansharking is a silent and often invisible crime which can have devastating effects on victims. Loan sharks operate in various ways; on the street, from a house, within a pub or a doorstep collection scheme.
Loan sharks tend to be community based and are unlikely to offer any paperwork. They lend anything from a few pounds to several thousand pounds and prey on people who may have been refused credit.
Dumfries and Galloway Council’s Trading Standards service is raising awareness this Christmas of loan sharks and the support available for victims.
Councillor Tom McAughtrie, Chairman of the Community and Customer Services Committee said:
“The run up to Christmas can be a difficult time financially for many people and it’s easy to understand why we can all feel the pinch at this time of the year. I would advise anybody experiencing financial hardship to contact the Council’s Financial Inclusion & Assessment Team on 030 33 33 3008 to get free advice and not be taken in by loan sharks.”
If you think that a loan shark may be working in your area, you can make an anonymous phone call to 0800 074 0878 or go to www.stoploansharks.org.uk
Case Study
It started with small amounts (£5 or £10) and they would have to pay back an additional £3 on the loans as interest. As time went on they required larger amounts from the loan shark and eventually borrowed £400. The agreement was that they pay back £80 per week and an additional £400 per month from their benefits.
Eventually this victim had to move away from family and friends to escape as they were too afraid and intimidated by the loan shark to stop making the payments and could not afford to keep up with them.
Having moved away they always lived in fear of being found by the loan shark and reported him to their local Police as a last resort. The Police worked with the Scottish Illegal Money Lending Unit investigators and were able to identify other victims and build a case against the loan shark. The loan shark was jailed for 15 months and also lost assets through the Proceeds of Crime Act.
Two of the victims paid back over £40,000 in total over the years they were borrowing. The loan shark charged a compound interest rate of more than 700,000%
Both victims were supported by the Scottish Illegal Money Lending Unit to assist them with moving on from needing to borrow from loan sharks or other lenders. They were supported with budgeting skills and assisted with lifestyle changes. One victim was linked in with adult learning classes to help her with her numeracy and literacy skills and within a few months was working in a café.
