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Legal
Chris Connor
LIAISE Officer
Trading Standards Illegal Money Lending Team
What is a loan shark?
• A loan shark is someone who lends money without the licence required by the Consumer Credit Act 1974.
• These licences are issued by the Office of Fair Trading to individuals or companies whom they believe are “fit and proper”.
• It is a criminal offence not to have the requisite licence and carries a maximum sentence of two years in prison.
• Who enforces this legislation?
Trading Standards and the national
Illegal Money Lending Project
• Powers to ENTER.
• Powers to SEIZE.
• Powers to CHARGE.
• Powers to PROSECUTE.
• IMLT within the team has powers to ARREST.
“ARNIE’S” AREA
• One area on “Arnies”
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Crimes
Reported
Established loan shark victim
rehousing protocol with these
Birmingham Partners
Birmingham Civic
Housing Association
Other area protocols
• Dudley, Sandwell, Solihull, Walsall, Wolverhampton
• In progress – Warks, Stoke and Staffs
MILLS
• A loan shark who preyed on the vulnerable lay in wait for a victim at the Post Office before taking her and her mother’s benefits.
Winston Mills handed back just £10 for the two women to live on.
• Mills, 41, worked as house manager at a hostel in Openshaw for five years and got free board in return.
He would befriend troubled tenants before lending them small amounts of cash, interest-free.
Once they had got into the habit, Mills would jack up the interest to rates of up to 50 per cent, leaving borrowers trapped in a spiral of debt
What are some typical characteristics
displayed by loan sharks?
• No credit agreements given – “you owe me this much today”
• No receipts for payment or payment books
• Violence, intimidation or threats if repayments are missed
• Loans to young people (under 18’s)
• Can take illegal securities e.g. cash card• Never advertise – find clients by word of mouth.
• Repayments of at least twice the amount lent, often with very high charges for defaulting
• Personality changes when victim can no longer meet payments
Who is affected?
• report estimated 320,000 UK households use IML
• This equates to 6% of households in most deprived areas
• UK repays £120 million per year to IML
• Victims most likely female, aged 30-40, on welfare benefits, living in social housing
• Less prevalent in the UK compared to international counterparts
Loan Shark Customer
• Often very young, singles and younger single parents• • Frequently heavily dependent on family support• • Poor financial skills:• • Problems with prioritising• • Difficult to resist temptation• • Typically history of failed catalogues and home credit loans• • No engagement with creditors• • Budget entirely on their full income so frequently left with nothing• • Sustained week to week by informal lending compromising family
and social networks• • become increasingly desperate for cash to meet essentials• May say they have borrowed from a “friend”• May try to hide amounts when completing I&E forms
The affects on a community
• Their control over their victims rests on a climate of fear which both protects revenue flow and acts against reporting
• There is a high degree of cross-over between illegal money lending and criminal lifestyles with some victims drawn into theft, drug running, prostitution
• Illegal lending hollows out the finances of victims, exacerbates crime and anti-social behaviour and deepens financial and social exclusion
What happens when we start
operating in a new area?• Using a brand mark.
• Poster campaigns.
Advertisements on
public transport.
• A 24/7 hotline . 0300 555
2222
The story so far…….
• Over 1,700 targets have been identified (and increasing)
• Arrested over 500 illegal money lenders
• Over 16,000 victims have been helped.
• Over £37,000,000 illegal “debt” wiped out.
• Prison sentences totalling over 107 years for illegal money lending.
• We have seized over £1.3 million in cash.
• £20 million+ of assets being investigated under POCA
• Referred over 600 victims to legal sources of credit
It is not a community service..
Working in partnership
• To build effective relationships with key partners• Concentrated programme of networking to increase
awareness
• Key part in local authority’s financial inclusion strategy
• Trading Standards
• Local housing Departments/Housing Associations
• Credit unions
• WM police
• Social services depts
• DWP
• Financial Services Authority
• Community safety partnerships
Awareness Raising
POCA Money
• Credit Union incentive Schemes
• Awareness days
• Drama project
• Pub beer mat campaign
• School Rap competition
We hope we can carry on our
successes with your help.
Questions?
0300 555 2222
Tel 07500809341
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