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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1st

Nov

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1st

Nov

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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

Christopher.connor@birmingham.gov.uk

Tel 07500809341