Financial Problems, Illegal Money Lending and Loan Sharking
Financial Problems
Overall, nearly two-thirds (63%) of UK adults have been concerned about a friend, family member or colleague’s mental wellbeing, linked to money worries
Of those who have been worried, the most common signs include changes in mood and temperament trouble sleeping, and being anxious, stressed or lacking in confidence to contact the bank or creditors.
You can use the LEPH approach to look out for these signs and enable people to access help, guidance and advice on mental health, debt and money management. There is a wide range of guidance available from the Money Helper website which has been incorporated into LEPH Link.
Illegal Money Lending and Loan Sharking
Illegal Money Lending is money lending by people who aren't authorised by the Financial Conduct Authority (FCA) https://www.fca.org.uk/ It is a criminal offence to offer loans as a business without having a permission from the FCA holding a sentence of 2 years imprisonment. Illegal money lenders are also known as loan sharks.
Loan sharks often work from home, charge very high rates of interest and don't give individuals paperwork to confirm the arrangements they have made. Loan sharks may take other illegal action to collect the money they have lent a person, such as threatening violence or taking away credit cards or valuables. In extreme cases, they have been known to force non-payers into prostitution and crime.
You may be the first person to take information from a victim of illegal money lending. Victims are often vulnerable, scared, worried and stressed as loan sharks are very controlling, can threaten victims’ families, damage property and carry the ‘fear factor’ to enforce the loan payments. Victims usually pay back at least double what they have borrowed and once trapped by the loan shark debt the cycle is hard to break.Â
Very Brief Intervention
Ask
Empathise that its normal to worry about money issues but reassure that there is lots of free help available - See the ACT section for details of national organisations and ASSIST for a list of local services
Do you have any worries relating to money, budgeting, borrowing or debt?
For Debt
Are you worried about a current debt that you can no longer manage?
Are you concerned about managing debt from a Money Lender?
The England Illegal Money Lending Team (EIMLT) is a national Trading Standards Team with a remit to prosecute loan sharks and to support victims of the crime and have a 24 hour helpline for officer to obtain advice and for victim support. Details are found in the ACT section.
Are you being threatened or harassed in relation to money you have borrowed?
Did you know that there is lots of free debt advice services available across the UK, would you like further information on these?
Re-assure them that a debt adviser will never judge them or make them feel bad about their situation and that they will work with the person to find way find ways to manage their debts even if they think they have no spare money.
Re-assure them that most people who have get debt advice feel less stressed or anxious and more in control of their life again.
For Borrowing
Before borrowing money have you considered if
- You need to spend the money
- You have other ways of financing the purchase, and
- You can afford to pay back the money you’re planning to borrow
If you need to borrow money, have you considered the cost of borrowing and where you would source this from?
Money Helper has advice on different sources of borrowing as well as advice on good debt and bad debt, would you like some further information on this?
For Budgeting
How confident are you about a budget setting, sticking to it and how to save?
Did you know that Money Advice Service provides a range of management tips, including how to set up a budget, sticking to it and how to save, would you like some further information on this?
Assist
Local Services
What you can do to help depends on the particular circumstances and needs of the individual. Is this person a victim of illegal money lending or do they need another form of support relating to finance problems and debt management?
Please click on your regional links below for information about finance and debt support services relating to your locality.
Act
National Support Services
The England Illegal Money Lending Team (EIMLT) STOP LOAN SHARKS
EIMLT is a national Trading Standards Team with a remit to prosecute loan sharks and to support victims of the crime. The team uses the Financial Services and Markets Act 2000 to obtain warrants and has the power to enter properties, seize evidence, arrest, charge and prosecute criminals acting as loan sharks. IMLT will investigate and prosecute for all crimes that are linked to illegal money lending and provide full support to victims who at the point of reporting have often reached their crisis point and urgently need the help.Â
Tel: 0300 555 2222 – 24 hours – report, guidance and support
Live Chat: 9am to 5pm Monday to Friday via website -
Email: reportaloanshark@stoploansharks.gov.uk
Money Helper
Free and impartial money advice, set up by government
- Advice and guides to help improve your finances
- Tools and calculators to help keep track and plan ahead
- Support over the phone and online
Tel:Â Â 0800 011 3797 Monday to Friday 8am-6pm
Web:Â https://www.moneyhelper.org.uk/
Email:Â money.enquiries@moneyhelper.org.uk
Typetalk: 18001 0800 915 4622 Monday to Friday, 8am to 6pm, Saturday, Sunday and Bank Holidays, closed
Citizens Advice Service
The Citizens Advice Service can help you to make the right choices, including help to deal with your debt problems, how to avoid losing your home and how to get your finances back into shape. Citizens Advice also offer advice on Benefits and Tax credits as it's important to make sure that you get all the help that you're entitled to
Tel: 03444 111 444 – Monday - Friday: 8am -7pm
Web:Â https://www.citizensadvice.org.uk/debt-and-money/Â
National Debtline
National Debtline has helped millions of people with their debts. They'll talk peopl through options and give clear advice on how to take back control.
Tel: 0808 808 4000 – Monday – Friday: 9am – 8pm, Saturday: 09:30 -1pm
Web:Â https://www.nationaldebtline.org/ web chat via the website
Monday to Friday 8am to 8pm and Saturday 8am to 4pm
PayPlan's supportive, non-judgemental team of advisers help thousands of people beat their debts every year, and treat all of their calls with the strictest confidence.
Tel: 0800 280 2816 - Monday – Friday: 8am – 8pm, Saturday 9am – 3pm
Web:Â www.payplan.com
Debt Advice Foundation is a national debt advice and education charity offering free, confidential support and advice to anyone worried about debt.
Tel: 0800 622 61 51
Web:Â http://www.debtadvicefoundation.org/
Credit Unions
Credit unions offer an alternative to traditional banks and building societies for saving and borrowing.Â
They're there to provide a financial community. Credit Unions can help those who can't get access to ordinary bank products; a lifeline in less well-off communities for people grappling with their finances.
Local Support and Contact Details
Derby City Council
Help with your housing costs and other expenses
Web: https://www.derby.gov.uk/coronavirus-covid19/financial-community-support-residents/help-with-housing-costs-other-expenses/
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Loan Sharks
You can now report a loan shark online at www.stoploansharks.co.uk
 Stop Loan Sharks 24/7 Helpline: 0300 555 2222
Live Chat available 9am-5pm weekdays at www.stoploansharks.co.uk
Derbyshire County Council
Money, benefits and debt due to COVID-19
https://www.derbyshire.gov.uk/social-health/health-and-wellbeing/health-protection/disease-control/coronavirus/money-benefits-and-debt/money-benefits-and-debt.aspx
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Derbyshire Discretionary Fund (DDF)
The Derbyshire Discretionary Fund (DDF) can provide grants or emergency cash payments if you are in urgent need of financial help following a crisis or disaster.
Web:https://www.derbyshire.gov.uk/social-health/adult-care-and-wellbeing/benefits-debt-and-legal-matters/managing-money-and-debt/derbyshire-discretionary-fund/derbyshire-discretionary-fund-ddf.aspx
LOAN SHARKS
Everything you need to know about loan sharks
A report published by the Centre for Social Justice estimated 1.08 million people in the England could be borrowing from an illegal money lender – more commonly known as a loan shark. This figure has more than trebled since 2010.
With price increases on everything from fuel to food making it increasingly tough for households to make ends meet, unlicensed lenders are stepping in, offering loans to the desperate at astronomical interest rates.
Loan sharks prey on the most vulnerable people in our society. They often use threats, violence and intimidation to enforce repayment and can keep their victims trapped in a cycle of debt for years.
What is a loan shark?
A loan shark is someone who lends money illegally without the correct permissions from the Financial Conduct Authority (FCA).
Lending money without a licence is illegal. However, it’s important to know that if you borrow from an illegal money lender, you have not broken the law, they have.
Illegal money lending is a hidden and under-reported crime and can cause a great degree of terror and fear in those who get involved. Borrowers can become trapped in a spiral of extortion, facing intimidation, violence and financial ruin.
Loan sharks are often seen as a last resort for people who have no other option for obtaining credit, including those with poor credit histories who are rejected by mainstream lenders. With just one unexpected bill, people can quickly find themselves in the grip of an illegal lender.
The real danger of loan sharks is not just the large sums of money they lend out and extortionate rates of interest they charge. It’s the psychological toll it often takes on borrowers and their families, leaving them feeling trapped and helpless.
How can you spot a loan shark and what are the warning signs?
The loan shark might be a friend or acquaintance, or they might simply be someone known in the area for lending money.
They may deal in cash, rarely provide any paperwork, and will charge exorbitant amounts in repayment, or they may not even be clear about what the borrower has to pay back.
Loan sharks can be very dangerous and sometimes they use threats and violence against those who fall behind with their payments.
Cyber loan sharks are also becoming more prevalent luring their prey in through social media and other online platforms. These lenders usually use misleading ads, false promises of easy money and harassment to trap unsuspecting victims in debt, using fear to suck them in and exploit their vulnerabilities.
If you can answer yes to one or more of these questions, you may be borrowing from an illegal money lender:
- Did they offer you a cash loan or bank transfer?
- Did they not give you paperwork?
- Did they add huge amounts of interest or APR to your loan?
- Have they threatened you?
- Are you scared of people finding out?
- Have they taken your bank card, benefit card, passport, watch or other valuables from you?
If you're considering using a loan shark, think again. They often make it look like they're helping you out but in reality, it's a trap.
Is your lender legal?
If someone is lending you money, they must be registered with the Financial Conduct Authority (FCA). The Financial Services Register lists firms and individuals that have authorisation to offer loans and credit. Make sure you do your research before borrowing money.
How to get help
If you have borrowed money from a loan shark or you’re worried about a loved one, you can access specialist advice and support from the England Illegal Money Lending Team. The team exists to help victims of illegal lending and their friends and family.
The Stop Loan Sharks Helpline is available 24 hours a day, 7 days a week on 0300 555 2222. You can also use the confidential live chat service on their website to speak to a support worker (available 9am - 5pm, Monday - Friday).