New measures to combat loan sharks

[Amethyst]

Tuesday 3 March 2009 07:30
Department for Business, Enterprise and Regulatory Reform (National)

New measures to combat loan sharks

New measures to tackle criminals illegally lending money were announced today by Consumer Affairs Minister Gareth Thomas.
The national hotline - which is confidential - is now up and running and gives consumers one single point of contact.
A new website has also been launched providing information on managing finances and how to borrow money safely.
The Stop Loan Sharks teams have successfully prosecuted more than 60 people with a further 90 prosecutions underway. This amounts to nearly 40 years of custodial sentences for illegal lending and associated crimes.
The teams have supported more than 7,000 victims of illegal money lenders. The first two pilot schemes were launched in September 2004 and then rolled out to every region of England, Wales and Scotland in 2007.
Their work has meant around £14million has been saved for consumers who were locked in illegal deals with these money lenders.
Consumer Affairs Minister, Gareth Thomas, said: "Loan sharks fleece hard-earned cash from their victims causing great distress and anguish.
"Calling this hotline gives victims the chance to talk in confidence. They get advice and support and the information provided helps the team to take action to stop illegal money lending.
"The teams are having huge success in bringing these criminals to justice and are saving consumers significant amounts of money."
The national hotline - which is confidential - is: 0300 555 2222. And the website is: http://www.direct.gov.uk/stoploansharks Consumers can also text 'loan (space) shark (space) and your message' to 60003.
Notes to editors
1. The national helpline replaces the individual regional numbers.
2. Government has committed £11m since 2004 (first two pilot areas were Glasgow and Birmingham) to tackling this problem and will continue to fund a team in every region until March 2011.
3. An estimated 165,000 households in the UK use an illegal money lender each year according to independent research commissioned by the then DTI (Nov 2006)
4. The Consumer Credit Act 1974 requires lenders to be licensed by the OFT. Trading Standards departments have responsibility for enforcement against unlicensed lenders.
Client ref 2009/45
COI ref 171215P

[Mochamoo]

Re: New measures to combat loan sharks

Loan sharks bite in recession




by Caroline Hawley




An Operation Sharkbait police officer's stab-resistant vest


Full Newsnight report

It is 6.30 in the morning at a West London police station.
Police and investigators from London's Illegal Money Lending Team are making final preparations for a joint raid on a suspected loan shark.
As dawn approaches they set off.
The officers are wearing stab vests bearing the Operation Sharkbait logo and are armed with an enforcer, a special tool that puts three tonnes of kinetic energy through a door.
The suspect they are after is, according to intelligence, "volatile".
She is alleged to have loaned more than £1m at extortionate rates to hundreds of victims over several years, and to have seized some of their identity documents.
A profitable time
No-one knows exactly how many loan sharks are operating around the country, it is, after all, a criminal activity.

I was frightened for my life. They said... 'First we will kill your wife and your son, and then your daughter. You will see, everyone from your family will be killed'


Loan shark victim

But hundreds of thousands of people are thought to be using them and, as the recession bites, no-one doubts that the numbers are rising.
"As people find themselves in more and more dire straits, they'll look to any source of income," says David Sayer, head of the Illegal Money Lending Unit in the north-east of England.
"There will now be new people needing the services of loan sharks. It's a profitable time for them. We think there's an awful lot more of it going on."
And he says he hears "horror stories" from his investigators.
"We've had a sexual assault on a woman with special educational needs, and there are other examples of people being sexually assaulted."
Victims
The most common victim is, according to Sayer, a young single mother.

An officer on a raid, armed with a special 'enforcer' battering ram

"We've had incidents of children being followed by the loan shark," he says.
"We have had stories of people hiding behind the furniture with the lights out because the loan shark is at the door.
"Sat there with their hands over their children's mouths, so the house appears to be empty and the children aren't making a sound."
Many victims are too scared to talk about their ordeal.
"I was frightened for my life," one victim who doesn't want to be identified told the BBC.
"They said you need to remember that you will be killed last. 'First we will kill your wife and your son, and then your daughter. You will see, everyone from your family will be killed.'
"I was so stressed I got ill and had to spend eight days in hospital."
Brisk business
Loan sharking has been around for centuries, in an often hidden world.


I don't know where I would be without them because I can't get money from the bank, but I feel that they have had a lot of my blood


Kath

But investigators in London say that, with the credit crisis deepening, they are now seeing a new type of victim.
"Traditionally, people think of a loan shark victim as perhaps someone who doesn't have financial skills, and lives in an area of deprivation," says Peter Richardson, head of London's Illegal Money Lending Unit.
"We're coming across people who are the opposite to that.
"They perhaps own or rent a home, rather than having social housing, so they've definitely been able to access credit in the past, but because of multiple legal debt issues, they are now unable to."
Loan sharks are not the only winners in these dark financial times.
Doorstep lenders and pawnbrokers are also doing brisk business.
"We're busier than ever," says George Smith, manager of Cash Converters in Stockton-on-Tees.
"We're seeing an increase in new customers right across the social scale. People are losing their inhibitions about coming in and selling us goods. We're getting people coming in that two years ago would not have dreamt of coming into a Cash Converters store."
The door-to-door lending industry
Legal doorstep lenders appear to be busy as well.


Police raid on the home of a suspected "volatile" loan shark

"I've personally seen about five or six doorstep lenders in the past week targeting my estate," says Maurice Clarkson, a community activist in the Stockton area.
"They're already speaking to people about loans for next Christmas."
Kath, who has three separate loans with Provident, the country's biggest home credit business, has some advice for anyone tempted to take out such a loan.
"Resist the temptation."
On a recent loan of £500, she will have to pay back £855.
"I don't know where I would be without them because I can't get money from the bank, but I feel that they have had a lot of my blood."
"Morally, I disagree with it. And I'm a fool to myself for taking it out," she says.
"They feed off people's misery, but they do it in a very nice way, up front. And we are conned by it. When you are desperate you will do anything. A drowning man will clutch at a straw. So someone who needs money for a present or a funeral will take out the loan."
National helpline
Provident is by no means alone in the industry, in charging high repayment rates.
In a statement, it has defended its charges.
It said:
"Provident fixes the costs of its home credit products to cover the costs of the high service levels the product provides which include weekly calls at customers' homes to collect repayments, and no extra chargers whatsoever if customers miss repayments and so take longer to repay their loan. The total fixed charge for a typical loan per £100 borrowed is £71."
Credit unions are now being widely recommended by financial advisers as an alternative to both legal and illegal doorstep lenders.
And investigators trying to combat loan sharks stress that because the activity is illegal, debts to loan sharks do not have to be repaid.
A new national hotline is now being set up that can be called from anywhere in the country to report loan sharks.
The number is 0300 555 2222.

[Amethyst]

Re: New measures to combat loan sharks

And investigators trying to combat loan sharks stress that because the activity is illegal, debts to loan sharks do not have to be repaid.

Ouch thats a dangerous statement - considering some of the nasty *******s about - if you are stuck with one don't just stop paying - get proper help, immediately.

[Paule]

Re: New measures to combat loan sharks

Bomb threat loan shark convicted

Bomb threat loan shark convicted - News - Manchester Evening News

February 06, 2009

A LOAN shark, who squeezed hundreds of thousands of pounds from vulnerable people by assaulting and threatening them, has been convicted of 12 counts of blackmail.

Paul Nicholson, 39, from Delamere in Cheshire told one woman her mother's house would be petrol bombed if repayments were not made and told another distraught woman: "Your priority is to pay me, not feed your kids."

Nicholson, of Golf Course Road, targeted hundreds of poor people in Widnes and Runcorn.

Warrington Crown Court also convicted him of assault, lying about his criminal record, operating without a licence and acquiring criminal property.

He pocketed huge sums of money from "astronomical" interest rates of up to 125% during a four-year period.

His reign of terror helped net him a Land Rover, a Porsche Carrera and move him from a £170,000 property to a house bordering a golf course and worth more than £1m.

When police searched his lavish property they found "large quantities of loan records", two horses, £26,000 in cash kept in a range of places including boxes and a pair of tights, and a knuckle-duster in his Porsche.

Hearing the verdicts, Nicholson, a former nightclub bouncer with convictions for possessing a stun gun and supplying steroids, shook his head.

The warnings were there a couple of years before!!!!!

Driven to death by 90% interest

Oct 24 2006 EXCLUSIVE by Thomas Martin, Liverpool Echo

FALCON Securities Ltd are registered with Companies House and, until recently, were based at a residential home in Hale Road in Widnes.
The firm has been running for over three years and is headed by financial services manager Paul Nicholson.
The firm has two guideline interest rates, 90% and 70%, which vary according to how quickly a person needs the money.
Those who require money within seven days are placed on the 90%, or emergency list.
Anyone prepared to wait up to three weeks is charged 70% interest.
Neighbours say Mr Nicholson has now moved from his terraced house in Halebank, surrounded by a high hedge, to a four-acre property in Frodsham.
Mr Nicholson, was called to attend the inquest and was questioned during the hearing.
He denied putting Mr Shields under any pressure and insisted the 22-year-old had built up debt after getting mixed up in drugs.
He told the ECHO: “Brian was involved in drugs and got deeper into debt when he should have been trying to get out of debt. He was going all over town trying to get money.
“We are a fully licensed company. We have nothing to do with drugs and have customers in Warrington, Runcorn and Widnes.
“Every customer is started off on a high rate as we don’t know the person or if they will pay the loan back.
“It’s very sad that he died, but the family have started a witch- hunt against us.”
Advice on credit
CREDIT unions have slammed the cycle of desperation often caused by loan companies.
They believe a capping process should be set up to stop firms chargingextortionate levels ofinterest.
Christine Heesom, secretary of Halton Credit Union, said: “It’s appalling that a young life has been lost because of money.
“There is help out there, but when people are after you, a lot of em-otional stress is involved. Sometimes, credit is far too easy to get.
“Sadly, these people have power and we have heard stories about young women giving up their benefit books at the post office.
“It can be a desperate situation and it can be an impossible spiral to break free from once it has hold of you.
“Our first loan is only £300 and we try and re-educate people about how to save money. We offer budgeting advice and try to get people to sort out their finances on a long-term basis.”
What they said ...
DAVE Pye, owner of Runcorn Fencing, and Brian Shields’s boss:
“About two weeks before he died, we were all in the Sporting Ford pub in Widnes.
“Brian told us there was someone on his case and could we lend him money. I think we loaned him about £400 in total.”
Brian Shields’s friend [name withheld to protect his identity]: “As our drug debts had increased, [their dealer] had threatened us each Friday since August 2005.
“[He] would verbally threaten us and would refer to getting boys from Liverpool. [Dealer] stated that these boys were not the type of people to mess around with and would shoot us straightaway.
Paul Nicholson, financial services manager of Falcoln Securities Ltd:
“I remember that Shields was very keen to get his final loan, however he didn’t disclose what he wanted the loan for.”

[righty]

Re: New measures to combat loan sharks

I agree they should be stopped but they say 165,000 use them Christ 165,000 doesn't that tell you something when 165,000 people have to resort to dealing with these criminals.

Anyway who decides who the sharks are. For example look at Provi their rates are astronomical some thousands of percent per annum yet they are encouraged by government

Instead of all this spin & trying to look that they really are doing something why don't they make low cost credit easily available to the less well off instead of making it even harder for them to survive
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Also aren't many of the threats from some DCA's just as bad as those from the sharks

[Main man]

Re: New measures to combat loan sharks

Loan shark's profits help savers

posted : MONDAY, 23RD FEBRUARY 2009 16:00:04 GMT comments : 0

filed under : PROPERTY NEWS SAVINGS NEWS



Last Updated: Monday, 23 February 2009, 12:00 GMT
- Search: Loan shark savers








Money seized from a loan shark's illegal profits is to be used to help people in financial difficulties start their own savings accounts in the first initiative of its kind being launched on Saturday.
Richard Blair, of Avenue Road, Gosport, Hants, was given a suspended eight month jail sentence at Portsmouth Crown Court last November after pleading guilty to illegal lending, money laundering and intent to supply cannabis.
A raid at his home uncovered more than £35,000 in cash as well as details of his lending accounts.
The 42-year-old would often lend £100 and demand £130 be repaid the following week, keeping benefits cards as a surety against loans.



He even agreed to lend one couple £1,500, telling them they had to repay £100 per week over 25 weeks.
Now, with money forfeited by Blair to the courts, the South East England Illegal Money Lending Team is offering residents from the same community that he preyed upon an incentive to take up new savings accounts.
The team will add £20 from Blair's money to any new savings accounts opened on Saturday with the Hampshire Credit Union - a not-for-profit organisation that provides banking services for people who struggle with their finances.
The aim of the event is to encourage people to save their money and to highlight the dangers of illegal money lenders.
Consumer Affairs Minister Gareth Thomas said: "This is a truly innovative scheme designed to plough money seized from loan sharks back into the community.
"It will provide a good incentive to people to open up a savings account and regain control of their finances."

[Amethyst]

Re: New measures to combat loan sharks

I agree they should be stopped but they say 165,000 use them Christ 165,000 doesn't that tell you something when 165,000 people have to resort to dealing with these criminals.

Anyway who decides who the sharks are. For example look at Provi their rates are astronomical some thousands of percent per annum yet they are encouraged by government

Instead of all this spin & trying to look that they really are doing something why don't they make low cost credit easily available to the less well off instead of making it even harder for them to survive
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Also aren't many of the threats from some DCA's just as bad as those from the sharks

You remember a while back we were talking about the governments scheme of using credit unions to offer loans to people on low incomes and benefits alongside the social fund and crisis payments schemems.

This still, in my opinion, if done properly, is accessible and advertised well, would help keep a lot of these 165k away from the sharks, wouldn't it?

Will find a link to that thread and see what the updated info is.


Not sure that Provi are 'encouraged' by the government, it is kind of legalised loan sharking really, but in their reports on these new loans they did say it should take people away from these types of lenders too.

Thing with provi is they are 'pleasantly' flexible and quite happily let you miss a couple of payments and pay later (whilst whacking interest on of course)...I know my neighbours take full advantage. I did manage to talk one into a social fund loan when her washer broke down tho....trouble with them currently is they have to justify what the moneys for too much (which is good but means they go elsewhere for the 'christmas pressies' type loans)

[righty]

Re: New measures to combat loan sharks

AME as you know I'm a major advocate of CU's. I think they ARE the best to help people when it comes to borrowing money but apart from an initial burst there seems to be no attempt to encourage their use.

I understand your comments re Provi "legalised loan sharking" & that's my point it is legalised, legalised by government. Since when should it be OK for a lender to be allowed apply usery rates of over 1,000% pa to borrowers. In France for example this wouldn't be allowed

[Amethyst]

Re: New measures to combat loan sharks

Trouble with CU';s is they are inaccessible. I wouldnt have a clue where to start finding one/accessing one - they arent exactly in your face. Thats where they need to do the work I think.

(actually I do know about ABCUL etc but thats only through working on here - and it really doesnt help all that much - three in whole of derbyshire and one of those is for west indians only - I don't think average joe would know unless there was one on their doorstep)

[righty]

Re: New measures to combat loan sharks

CU's are usually either not far from the town center or the local area they service, so I don't know how you can say that. Why don't you find yours you may be surprised

Also when I 1st raised the subject I had hoped sites such as this would have emblazoned their use across the heading of the opening pages so that users would be encouraged at each visit to think about using them.

So rather than just leave it to the powers to be to publicize them we could be doing it

[Amethyst]

Re: New measures to combat loan sharks

Yes we could, although to encourage use we have to have experience of using them, and they have to be a viable option. The ability of CUs to offer DD's etc is a good step forward so yes they should be publicised more.

Found one about 12 miles from me but is only for people living or working in the town. And that was an effort to find.

The credit unions need to make a bit more effort - eg getting a web page up - so people can find them.

Its a search them out thing at the moment. And half the ones listed arent on the ABCUL sites.

But we listen, and to that end - Credit Unions - Legal Beagles - needs some info adding

[righty]

Re: New measures to combat loan sharks

That's great but I was thinking nay hoping it would be displayed in the header......... just below the bit that says "the site that cares"

[Amethyst]

Re: New measures to combat loan sharks

lol give it time, lets get some sensible easy to digest information up to make it a viable option first....

[righty]

Re: New measures to combat loan sharks

where there is no CU often the nearest offers a service to those who don't have one close at hand.

For example the one in our small market town is organised by the one in the county seat some 25 miles away
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Don't want to argumentative but still not sure what you mean by info

It ain't exactly brain surgery. 1st most people beyond the age of a teenager know what is meant by a CU & that you open an account (with proof of ID) you pay into that account what you can afford then you borrow an amount to say buy a new washing machine or put food on the table etc which you then repay at a very reasonable rate of %

[Tools]

Re: New measures to combat loan sharks

Different Credit Unions have different conditions attached to them and you have sometimes to meet strict criteria other than the norm of credit rating etc etc

However, here is my local CU and up until now I have not been interested in using them. But recently (after looking today due to this thread) I notice that they are now offering more services such as a Debit Card (albeit backed by Cooperative Bank) and other services. I am now seriously considering using them.

White Rose Credit Union

Have also just though righty, if you want to promote CU's, why not add them to your signature?