Loan sharks are illegal money lenders; they often trap people into a spiral of debt by adding exorbitant interest charges, so many victims end up paying back far in excess of what they borrowed. Few will offer paper work and even if they do ask the borrower to sign a document, the lender will rarely give them a copy to keep. This way they keep their victims completely in the dark as to how much they are actually paying.
Most victims of loan sharks were introduced to the lender by a friend or family member, and most say the lender was friendly and helpful at first. It is only once people are unable to keep up with payments, that the loan sharks often become intimidating, threatening or even violent.
Anyone can be a victim of a loan shark – your family, friends, neighbours. Even you.
Mary* a woman in her late 50’s fell into a loan sharks trap.
Mary was working night shifts in a care home alongside Joe*, a loan shark. She was aware that Joe gave loans, but it had never thought about borrowing. When a relative passed away, Mary needed money for funeral expenses. She was short of cash at the time and couldn’t wait until payday so she spoke to the loan shark at work.
Joe gave her a loan for £500 and asked her to sign a piece of paper, there was never any mention of additional interest. He then took this paper away and Mary was completely in the dark as to what she owed.
Once she thought she’d cleared the payment, she took another loan with Joe, unknowingly spiralling into further debt. Some of her friends wanted loans so Joe named Mary as the guarantor, meaning Mary had to pay up if her friends missed payments.
This continued for five years, up until the point when Joe was arrested by the England Illegal Money Lending Team. By this point Mary was working for nothing, as every penny she earned was going to Joe. She’d even taken out several loans from legitimate companies to pay Joe. The Team worked with her to get her life back on track, and as the debts were illegal and unenforceable in law, she no longer had to repay.
After receiving advice and support from the Team, Mary put together a three year finance plan with a national money advice organisation called Consumer Credit Counselling Service (CCCS) and aims to be debt free by the time she retires. She has reduced a £10k debt to £5k already, which she will have paid off in 18 months.For what seems to be the first time in many years, Mary is in control of her finances. She has taken out employment insurance for sickness cover and opened up a savings account putting away £50 per month. She feels she has “had a weight lifted off her shoulders”.
The England Illegal Money Lending Team are cracking down on offenders, having secured more than 190 prosecutions. Working in partnership with local Trading Standards, they are sending out a clear message that these criminals do not provide a community service; they are simply out to make money.
Many victims keep paying because they think they can afford the agreed weekly sum, but they don’t realise how much their continuing weekly payments add up to.
Our advice is that you should never go to a loan shark.
The Team are working with Age Concern and other partners such as credit unions, housing associations, Citizens’ Advice Bureaux and voluntary organisations to ensure people do not become vulnerable to loan sharks.
If you think a loan shark may be operating in your area, call the confidential 24-hour hotline, which is answered by a trained investigator
Hotline 0300 555 2222
Text ‘loan shark + your message’ to 60003
Log-on to www.direct.gov.uk/stoploansharks