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Stop Loan Sharks!

This week is Loan Shark Awareness Week. When it comes to beating the loan sharks, our financial inclusion team have found that teamwork gets results.

John Smith, one of our Financial Inclusion Officers, (also pictured below), tells the story.

“Some time ago, I was asked by one of my colleagues, also a Financial Inclusion Officer, to provide a second opinion on the activities of someone she had become aware of.

At that time there was no suspicion that the person we were talking about was a loan shark. If there had been we would have reported it immediately to the Illegal Money Lending Team.

Together we arranged for this person to come into Plumer House where we questioned him about some of his activities with our tenants. He brought ring binders crammed full of paperwork. He said he was working on behalf of these tenants and charging them £10 per month each.

We never got to see what clients he was talking about and, given the rules around Data Protection, we would not have expected to.

It didn’t make sense to us. Firstly, in order to make a living out of debt advice you would need to be charging more than £10 per month per case.

Secondly, if you had enough clients to be able to make a living by charging £10 per month each, then it was surely impossible to be providing a decent service!

The man revealed he had a full pension from a previous job and that distorted our thinking.

Knowing how difficult it is for some of our tenants to make ends meet posed another question – how did they manage to pay their £10 per month to keep him acting for them?

Something didn’t add up – we knew how much work was involved in providing proper debt advice.

As he left the building there was still no suggestion that he was lending money illegally and there was nothing more we could do.

About three months later, I visited a tenant in Southway who was in rent arrears.

When I entered the living room, the man we’d interviewed three months earlier was there waiting for me. I thought it odd but didn’t feel threatened so our meeting continued. He was introduced as a friend of the tenant but we recognised each other.

As the conversation continued between myself and the tenant, this man chipped in to our chat.

It was only when I asked her to read and sign a form to enable me to discuss her circumstances with organisations such as the council, that my suspicions were raised. She immediately gave it to him to approve before signing. Something was not right.

I could see the control he was exerting over the tenant. I still had no evidence though.

When I went back to the office, I let my colleagues know about this man and asked them to let me know if they ever came into contact with him.

Some months later, one of my colleagues alerted me that this man had just paid the rent of a tenant in Estover.

I arranged to go and see her. She told me she had been borrowing money from this man for around 20 years. He had been rolling these loans over all that time.

With our support, the tenant reported this to the Illegal Money Lending Team and they put a plan into place to investigate the situation and support the tenant.

They also told the tenant she did not need to make any further payments to any loans she had from this man. That’s a crucial thing to remember – a victim is not legally obliged to pay back loan sharks as they have been loaned the money unlawfully in the first place.

A loan shark victim has not broken any laws, it is the loan shark who has broken the law. Victims have nothing to fear from making a report. They may even be able to get some of their money back.

The IMLT raided the man’s home and found a room full of ring binders jam packed with accounts – hundreds if not thousands of illegal loans in our communities. He was charged with illegal money lending and money laundering.

Through teamwork, we managed to put a stop to this.

It’s really important to remember that loan sharks may start out friendly enough but they can quickly turn nasty. They can use threats and violence – not just to people they’ve loaned money to, but their children too.”

If you are worried about loan sharks, call our team on 0800 028 0350 or the Illegal Money Lending Team on 0300 555 2222 in complete confidence.