Cracking down on loan sharks
15th September 2008
Alan has welcomed the early results of a government crack-down on loan-sharks in the south-east.
Since September 2007, the team has charged one man with illegal money lending and secured a guilty plea, and charged another with illegal money lending and drug possession (hearing to take place at the end of September). There are 12 more investigations ongoing.
Alan raised the issue of ‘debt on the doorstep’ two years ago in an adjournment debate in Parliament, where he brought to national attention how low-income families who could not access credit on the high street were being targeted by doorstep lenders who offered credit at extortionate rates of interest.
Following on from this debate, a specialist debt-advice service was assigned to work in Southampton, and pilot schemes to crackdown on loan sharks were extended to cover the south-east.
The south-east team can be contacted in complete confidence 24 hours a day on 0300 555 22 22.
Dr Whitehead said:
“The threat posed by loan sharks to families on low incomes is not new. But the credit crunch has made it all the more important that we target resources to protect families who are most likely to be the targets of these cynical and often illegal practices. Part of that is ensuring that when loan sharks do break the law, we come down on them hard. The other side is working to ensure low-income families have improved access to legal and properly regulated sources of credit, which I continue to work on in Parliament and in Southampton with organisations like the Solent Credit Union.”
Consumer Affairs Minister Gareth Thomas said:
“The team has 12 investigations underway into loan sharks. The total value of the loans being looked into is about £375,000. The investigations are progressing well and have already led to charges being brought, with more activity expected over the coming months.
“This team is working around the clock to ensure that the credit crunch doesn't drive people from the south east into the murky world of illegal money lenders.”
Sean Murphy, Chair of Trading Standards South East Region, said:
"Loan sharks target the most vulnerable people in society. They often use intimidation and violence to control their local communities and profit at the expense of others. Far from helping people, they draw them into a cycle of debt and despair. We are determined to stop them. Anyone that has been targeted by a loan shark should contact us so that we can take action and help."
The loan-shark team is part of a national roll out that builds on the huge success of pilot anti-loan shark teams in Birmingham and Glasgow. Since September 2004 these two teams have:
- shut down loan books worth more than £7million
- helped more than 6,000 victims
- seized and confiscated £260,000 in cash
- secured successful prosecutions which have resulted in sentences totalling over 33 years for illegal money lending and related criminal activity including assault, wounding, kidnapping, blackmail and possession of firearms
- In Scotland more than 30 individuals have been reported to the Procurator Fiscal
The Government’s multi-million pound investment means that there is now a specialist team in every region of England and in Wales and Scotland.
John Hutton announced funding for the new teams in September 2007. As part of this announcement the Birmingham pilot team was given funding to expand its operations into the south east. The team became operational towards the end of the year after completing recruitment and other logistical arrangements.
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More information
- Alan’s initial raising of the issue of doorstep lending in 2006 can be read here: http://www.alan-whitehead.org.uk/pr/pr2498.html
- Read Alan’s letter to the Competition Commission about doorstep lending here: http://www.alan-whitehead.org.uk/pr/2007/june27.html