Friend to foe – why you should never trust loan sharks

A guest blog from our friends at Stop Loan Sharks 

More than two-thirds of people affected by illegal lending believed the lender was a friend at the point at which they took out the loan.

Loan sharks appear friendly at first, but quickly trap their victims into a vicious cycle of spiralling debts through threats, violence, and intimidation.

These criminals rarely go round wielding baseball bats and smashing windows in. Instead, they use psychological threats and coercive control to extort money from vulnerable people.

Loan sharks have threatened to tell partners or colleagues about someone's financial problems or taken precious wedding rings to ensure further repayments.

In a recent case, the loan shark threatened to involve a victim’s family when he fell behind on payments.

The message read: "I will speak to your mum now... And I will come back later... She's got a nice car."

The loan shark also threatened to burn the victim’s house down and increase the interest on his £1,000 loan until he owed £7,000.

Crippled by debt and afraid of the consequences, some borrowers have debated suicide.
The mounting interest and threats can put a huge strain on finances and emotional wellbeing.

Independent charity Crimestoppers has teamed up with the England Illegal Money Lending  to raise awareness of the risks posed by loan sharks and encourage reporting in communities.

Matthew's story

 

After taking out a one-off £20 loan to feed his family, Matthew was trapped in a cycle of debt and misery, and the loan sharks were taking all his benefits. He was left with very little to live on and unable to pay for essentials like food and fuel.

More than half of people affected by this crime struggle to feed their children because of the pure greed of loan sharks.

After borrowing £20, Matthew began to borrow £100 a time, and with 50 per cent interest, was paying £150 back a week later. The loans increased from £200 to £300 every couple of weeks for around two-and-a-half years. He was trapped, and the loan sharks threatened his children.

Matthew was unable to see a way out the situation, so he lined up a row of pills and was prepared to take his own life.

But at the last minute, he plucked up the courage to call the Illegal Money Lending Team and his brave actions led to the arrest of these violent criminals.

He said: “If I hadn’t contacted the team, I wouldn’t be here.”

Borrowing from a loan shark can seem like an easy option, but often it will lead to a spiral of debt and extreme misery.

Removing loan sharks from communities helps reduce child poverty by increasing the amount of money available to families in need.
 

Signs to look out for when dealing with loan sharks:

• Won't provide you with receipts or proof of payments.
• Increase the debt or add additional amounts to it without your permission.
• Refuse to give information, such as the interest rate or how much you still owe.
• Not allow you to settle your debt.
• They may resort to intimidation, threats or violence.
• May suggest other forms of payment such as sexual favours.

If you have already borrowed from a loan shark, the important thing to remember is you haven't broken the law and there is help available.
 

Reporting loan sharks makes a difference – to you, your friends and your community.

If you have been affected by illegal money lending or have information about loan sharks operating in your area, call the Stop Loan Sharks 24/7 Helpline on 0300 555 2222.

If calling isn’t for you, you can use Live Chat to talk to the Illegal Money Lending Team in real time at www.stoploansharks.co.uk (available 9am-5pm, Monday-Friday).

After you have reported the loan shark, a member of the team will contact you at a time to suit you. They will listen to what has happened to you, explain how they can help and what options are available: