Scandal of a million people driven into the clutches of loan sharks | United Kingdom | News


Pressure… loan sharks harass people who have trouble making huge payments (Image: GETTY)

Families, desperate to make ends meet, borrow money from criminal moneylenders at exorbitant interest rates – sometimes amounting to 130,000% APR and more.

People are usually told to repay double usually in a month – and if they can’t they face threats of public humiliation, violence or even sexual abuse.

Yesterday the Daily Express joined a team of 14 investigators and police who raided two properties in a market town.

A 40-year-old father was suspected of having illegally lent money at “astronomical” rates to victims forced to repay.

Traveling in a convoy of unmarked cars, the team approached a terraced house on an estate in Bury St Edmunds, Suffolk, just after 6am.

With a child’s rocking toy in the front yard, the targeted house couldn’t have looked any less like the center of an alleged criminal operation.

On entering...police force their way into a suspect's home in Notts

On entering…police force their way into a suspect’s home in Notts (Photo: Nottingham Post)

A woman answered the door – and the officers, who were ready to force entry if necessary, were allowed into the premises.

A man, still in bed, was taken into custody as officers seized electronic devices, documents and papers.

A sniffer dog, trained to detect wads of cash, searched the suspect’s property and car.

The raid was led by a nationwide team of trading standards officers, the Illegal Money Lending Team, whose 30 investigators and 19 regional support officers make around 100 arrests each year.

Their workload increases as ever larger numbers are forced into the clutches of illegal moneylenders.

Mission... Quigley works hard

Mission… Quigley works hard (Image: Steve Reigate/Daily Express)

A report by the Center for Social Justice estimates that 1.08 million people may currently owe money to loan sharks, a number that has more than tripled since 2010.

The IMLT, which operates nationwide but is run by Birmingham City Council, estimates illegal moneylenders are involved in deals worth more than £750million a year.

Tony Quigley, the IMLT service chief who led yesterday’s raid, said: “We know this problem is getting worse. Every one of my officers is working at about full capacity.

“One of the difficulties we most often encounter is that the victims of loan sharks do not realize that they are victims. Many people see them as a friend who helps.

“As a result, even when we make an arrest, most people don’t want to testify against them.

“But let’s be clear, a loan shark is not a friend. They are there for themselves. They make money, sometimes astronomical profits, on the backs of those who can least afford it.”

Raid... Police workload rises as millions are driven into the clutches of loan sharks

Raid… Police workload rises as millions are driven into the clutches of loan sharks (Photo: Nottingham Post)

He explained how illegal moneylenders operate and revealed how those who owe money are threatened.

Mr Quigley said: “The usual arrangement is that you pay back double.

You borrow £500, you owe £1,000. The reason annual percentage rates are so high is that you pay them off so quickly.

“The methods used to force people to make payments are coercive and pernicious. They will find your weakness and use it.

“In one instance, a lady was trying to avoid her loan shark because she couldn’t pay him. She was struggling.

“He would knock on her door and she would hide with her children. He would sit outside her house, sometimes for hours.

“She asked a friend to pick up her children from school because she was afraid of running into this individual. She was terrified.

“One day, as she was at the window, he came around the corner with his children, one in each hand.

“She came out freaking out and he said, ‘I know you’re avoiding me, you’re going to pay me.

“He never did anything to the kids, he bought them sweets, they were safe. But can you imagine the psychological harm it did to him? It really scared her.

“There was no threat, there was no violence, it was just this underlying coercive and psychological pressure. It’s damaging to people’s mental health.”

Mr Quigley added: “The problem is that when you’re in debt and you can’t see the wood for the trees, you see a quick and easy way out – but that just throws you deeper into the mud.

“The impact of illegal money lenders is the erosion of the quality of life of their victims and the detrimental impact on their mental health.

“My view is that if we can stop a single person from going to an illegal moneylender, I’ll consider that a success – but we aim to do better than that.”

A spokesperson for the Center for Social Justice said: “Illegal lending comes in many forms, from small moneylenders who harass victims to violent predators and organized crime groups.

“Some even try to add a thin veil of legitimacy by posing as a business, writing bogus contracts.

“New evidence shows that illegal moneylenders are increasingly operating online.

“Now, more than ever, victims are exposed to relentless manipulation by their exploiters.”

£750 loan cost thousands in 10 years

A mother-of-two has told how she ended up paying thousands of pounds to an illegal moneylender for almost 10 years after borrowing £750.

Kim, now 41, and her then-partner eventually took out four loans from the same woman and gave her half of their net income each month.

Like many victims, they thought the criminal who exploited them was a friend.

Kim, from the North West of England, said the loan shark was a woman who had previously worked for a legitimate moneylender.

She said: “We trusted her. We thought she was operating legally and she told us we were ‘good payers’. She used to come and sit in our house and take care of my children.

“She told us about her family and her vacation. We were friends. We had known her for a while.”

For an initial loan of £750, Kim was repaying £400. The moneylender knew when her payday was and harassed her until the payment was made.

Kim still took out other loans. She explained: “We were both working and so people think you have money, but by the time you’ve paid your bills you don’t have much left in the pot.

“It’s hard if the washing machine breaks down or you don’t know where the money comes from for Christmas – and if someone throws money in your face, you don’t think too much about it .”

Then, one tough Christmas, after many years of paying off, Kim found herself stuck.

“She was constantly texting me and I felt harassed. I asked her if I could miss a month but the messages she sent back were that I had to pay. There was no choice.

“I thought, ‘This is not right.’ I went to Citizens Advice to find out what my rights were and it became clear that I was not dealing with a legitimate lender.”

The lender has been arrested and the case is ongoing.

Advising those in dire financial straits, Kim added: “It may seem like you have no other choice, but going with an illegal moneylender will make the situation you are in worse.”


Loan sharks preying on cash-strapped Britons have become increasingly common.

Our research found that over a million people are now borrowing money from an illegal moneylender in England, more than three times the figure in 2010.

We found evidence of victims being kidnapped, threatened with extreme violence, rape and other forms of sexual exploitation.

Loan sharks target people by exploiting their vulnerability to charge exorbitant repayment rates – and a large proportion of victims borrow money to cover utility bills or essentials, such as school uniforms. There are also middle-income victims who face cash flow problems or who run a business.

We found that 80% of those who first try to borrow from legal sources are turned down.

Credit unions should be given new powers to provide a financial lifeline to those turned away from traditional credit.

But to put an end to the scourge of loan sharks, we must also raise awareness of these hidden debts.

  • Matthew Greenwood is acting debt manager at the Center for Social Justice

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