Special team declares war on loan sharks
STEPHEN PULLINGER An elite trading standards team based in Birmingham is about to launch a crackdown on loan sharks operating in poor districts of Yarmouth and Lowestoft.
An elite trading standards team based in Birmingham is about to launch a crackdown on loan sharks operating in poor districts of Yarmouth and Lowestoft.
While the scale of the problem has yet to be gauged, a report to Norfolk County Council's cabinet suggests unlicensed money lenders resort to intimidation and violence and charge interest up to an annual rate (APR) of 117,000pc.
Suffolk County Council has already approved the operation - carried out by officers from Birmingham City Council and funded with £302,000 of government money - while Norfolk County Council's cabinet is set to give it the go-ahead on Monday.
Since the team was established as a pilot project in Birmingham in September 2004 it has worked closely with the police to identify more than 200 illegal lenders and shut down loan books worth more than £3m.
In the latest phase of its operation, the team will focus on areas vulnerable to loan sharks across the Eastern region, targeting Peter-borough as well as Yarmouth and Lowestoft.
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The report to cabinet outlines the objectives of the operation as to gauge the scale and impact of illegal money-lending, to create a climate where victims come forward without fear of reprisals, and to change the perception that illegal money lending is rarely prosecuted.
It will also seek to develop ways of replacing the removed lenders with more support for victims through such agencies as local debt advice teams and credit unions.
The report says evidence indicated that illegal money lenders were widespread and prevalent, operating in areas that have a high proportion of rented accommodation.
They varied from those who lent £10 over a few days and demanded £12 on repayment to those who provided substantial loans to those looking to set up businesses. Interest rates could range from 100pc to 117,000pc APR in some instances.
Common traits included adding indiscriminate charges, targeting single mothers and introducing payment through sexual favours.
David Collinson, head of Norfolk County Council's trading standards, said: “This project is having a huge impact economically, socially and in reducing crime. Loan sharks are criminals who target the most vulnerable people in society and these teams can improve the lives of so many people and communities.”
Suffolk County Council spokesman Saraid Cann said: “It has proved difficult to get loan sharks before the court because they operate under cover and it is hard to get witnesses to come forward.
“However, this loans shark squad has a raft of measures at its disposal, including protection for witnesses, to help prosecutions.”
She said officers were experts at dealing with often delicate cases in the community.
t Heart-rending cases already helped by the squad include that of a 67-year-old woman with mental health problems who borrowed £100 to be repaid at £10 a month. Although she was not given any paperwork for this, she was told to sign a book belonging to the money lender. After she missed a few payments some men came round to her house demanding she now paid £200. Shortly after this, when she was out shopping, the money lender approached her and offered her a further £100 loan, which she accepted as she still had money problems. Last winter she became so desperate she tried to start a fire in her living room to keep warm as she did not have enough money to pay for gas.
In another case, Mr X had to re-mortgage his house to pay a £120,000 debt on an illegal loan of £25,000 paid to cover his son's gambling debt. The money lender had been threatening to have his son assaulted if the money was not paid.