It’s estimated that 300,000 households in the UK are currently in debt with loan sharks. These lenders aren’t regulated, and commonly use tactics like intimidation and violence to collect payments, as well as adding further interest and fees without any mutual agreement or warnings. Some investigations have shown that loan sharks are charging a staggering 719,000% interest, and tend to target those who are already struggling financially.
Tony Quigley, head of the England Illegal Money Lending Team (IMLT), says: “Loan sharks are a blight on society and prey on vulnerable people who struggle to make ends meet. These criminals use callous methods to enforce repayment and victims are often subjected to threats, intimidation and violence. We will not tolerate this sort of criminal activity in our country and loan sharks who are caught flouting the law will be pursued and prosecuted.”
As part of a new crackdown, the treasury has pledged to provide more funding to help tackle the issue of unlawful money lending. So far, £5.5 million has been spent in the fight against loan sharks, which has been used to prosecute the lenders and support victims. £100,00 of this money has been spent helping households to access safer finance options when they’re struggling. Anyone who’s involved with a loan shark has been urged to report it to the police.
The debt charity StepChange said that it supports the new measures. However, it’s also warned that the high cost credit, like payday loans, is an issue for society in general and causing further financial difficulties and mental health problems. Peter Tutton, head of policy at StepChange debt charity said that more needs to be done to help those in debt.
“Cracking down on the unconscionable activities of loan sharks is a very welcome step. It needs to be accompanied by a twin-track focus on the high-cost credit market more generally, to reduce the harm being experienced by vast numbers of households who are forced to borrow to make ends meet. Now is the time for the government to explore creative, sustainable alternatives to meet the needs of financially vulnerable households,” he said.