People are being urged to avoid turning to illegal money lenders to make up for a loss of income during the coronavirus pandemic.
The warning comes from Lancashire County Council’s Trading Standards team and the England Illegal Money Lending Team (IMLT) – a national team set up to prosecute loan sharks and support their victims.
Loan sharks are unregulated, often give cash loans without any paperwork and charge extortionate interest rates. They may offer what appears to be a quick-fix small loan, but in the long term, any money borrowed will come at a very high price and may lead to violence, threats and intimidation.
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One national case involved a loan shark who preyed on taxi and private hire drivers. They provided vehicles with regular payments plus interest and lent money at excessive interest rates. Drivers were typically paying back at least £100 per week.
To ensure loans were repaid, the unscrupulous money lender took different forms of collateral, including spare car keys and an electricity payment card from one customer.
Loan sharks often use threats and violence against those who fall behind with their payments, forcing many victims into crime.
Trading Standards work with the IMLT to tackle loan sharks locally.
County Councillor Albert Atkinson, Lancashire County Council’s cabinet member for technical services, rural affairs and waste management, said
We’re warning Lancashire residents and businesses not to get involved with illegal money lenders.
It may be tempting to use a loan shark, especially at this time when people have lost income due to the Coronavirus outbreak. Taxi and private hire vehicle drivers are at particularly high risk.
Using a loan shark is not an easy option and it will soon spiral into debts of thousands of pounds that you can never repay. There are often threats of violence and this will put a huge strain on your finances and emotional wellbeing.
In most cases, victims are introduced to the lender either through a friend, family member or because they are known in the community. Victims believe the loan shark is offering them a service, but their behaviour can quickly change if repayments are not met.
Tony Quigley, head of the IMLT, said
Drivers have been threatened, intimidated, some have even considered suicide because of the impact that these loan sharks have had in charging exorbitant rates and then demanding the money back.
I urge anyone affected by illegal money lending to get in touch for confidential support.”
If you believe you have borrowed from a loan shark, contact the England Illegal Money Lending Team in confidence so that they can help you. Call the 24 hour helpline on 0300 555 2222, email firstname.lastname@example.org or complete an online report form at www.stoploansharks.co.uk.
Citizen’s Advice provides information to help with debt and money issues. You can contact their Consumer Service on 0808 223 1133.