Loan Sharks, the hidden problem

We’ve invited Christopher Connor from the England Illegal Money Lending Team to come along to the TPAS conference and share his experiences of loan sharks and what we can do to eradicate them from our communities.
“Loan shark activity is a hidden problem. It may be happening on your estate and you are not aware of it. 77% of victims helped by the team in the first half of 2013 lived in rented accommodation.

People who borrow from illegal money lenders are victims of crime. Often illegal lenders will put immense pressure on people to pay back their loans, at extortionate rates of interest (examples uncovered include APR’s of up to 131,000% APR). Tenants can be in such fear of the illegal lender that they will lapse into rent arrears as paying the lender becomes their priority, this is understandable when the pressure imposed can be threats to “kidnap children, pets or hurt you personally”.

Illegal lenders will often use anti-social behaviour to intimidate their victims. This has included daubing paint on properties and smashing windows. In some extreme examples, people have even fled their homes due to the severity of the threat against them from the illegal lender, abandoning their tenancies and leaving the landlord with significant void costs.

When an illegal lender is removed from a community, any outstanding debts are usually written off. This leaves people with significantly more money available to them. IMLT work with local debt advisors to ensure that victims who have rent arrears come to an agreement to pay them back as soon as possible, utilising the “spare” money that they were paying the illegal lender to ensure their tenancy is sustainable. The team have examples where people who were about to be evicted have turned their finances around and now have sustainable tenancies.

Helping combat illegal lending can form part of a housing organisation’s wider financial inclusion strategy and can help reduce rent arrears.

Put simply, the victims of illegal money lenders are very often tenants.

If you are worried that you have borrowed from a loan shark call the hotline on 0300 555 2222 for advice”.