Team aiming to reel in the loan sharks

3:41pm Tuesday 21st October 2008

Comments (4)   Have your say »

A TEAM launched to hunt loan sharks in the south-east has begun a dozen investigations – including at least two in Hampshire – into people they suspect are lending illegally.

The team, set up by the Government at the end of last year and told to focus its efforts on a handful of areas including Southampton, has already helped bring charges against individuals accused of lending cash to vulnerable people at extortionate rates of interest.

They include a 42-year-old man from Gosport, who will appear in court at the end of this month charged with illegal money-lending, possession to supply class C drugs and benefiting from the proceeds of crime.

A second man, from Portsmouth, has pleaded guilty to illegal money-lending and profiting from the proceeds of crime. He will be sentenced next month.

The total value of the loans under investigation in the region is about £375,000, with further progress in cracking down on unlicensed lenders expected in the coming months.

The south-east team was set up following the success of trials in Birmingham and Glasgow, where more than 6,000 victims have been helped, more than £7m of loan books have been shut down and £260,000 of cash confiscated since 2004.

They have also secured jail sentences totalling more than 33 years for illegal money-lending and related criminal activity including assault, wounding, kidnapping, blackmail and possession of firearms.

The region’s anti-loan shark team, funded by the Department for Business and staffed by specialist trading standards officers who work closely with the police, hopes to replicate these successes in places such as Southampton.

Southampton Test MP Alan Whitehead, who raised the issue of loan sharks in Parliament two years ago, said: “The threat posed by loan sharks to families on low incomes is not new.

“But the credit crunch has made it all the more important that we target resources to protect families who are most likely to be the targets of these cynical and often illegal practices.

“Part of that is ensuring that when loan sharks do break the law, we come down on them hard.

“The other side is working to ensure low-income families have improved access to legal and properly regulated sources of credit, which I continue to work on in Parliament and in Southampton with organisations like the Solent Credit Union.”

Sean Murphy, chairman of trading standards south-east region, said: “Loan sharks target the most vulnerable people in society.

“They often use intimidation and violence to control their local communities and profit at the expense of others.

“Far from helping people, they draw them into a cycle of debt and despair.”

● The team can be contacted 24 hours a day on 0300 555 2222.

Loan sharks – know where you stand

■What to do if you’ve borrowed money from a loan shark You are under no legal obligation to repay the debt.

You should contact your local trading standards office. They will help you deal with your situation and the loan shark.

■ Is it a crime not to repay a loan from a loan shark?

If a lender isn’t licensed by the Office of Fair Trading then they have no legal right to recover the debt.

Loan sharks sometimes frighten people by saying they’ll be prosecuted and even sent to prison if they don’t pay up.

This can’t happen – not repaying a loan from an unlicensed lender isn’t a criminal offence.

■What to do if you’re being harassed Any lender, licensed or unlicensed, who harasses you is breaking the law.You should report any loan shark to your local trading standards office, and to the police if the loan shark threatens you or is violent.