Illegal money-lending presentation

An Overview
The England Illegal Money
Lending Team
•  3 Na&onal Teams, consists of Inves&gators, Liaise Officers, Intel Cell, Opera&on Managers, Background staff and press office. LIAISE Work from region Best Prac&ce Specialist skills Hosted by Birmingham
City Council
Inves&gators Work from Birmingham Safe and efficient systems 2
Key Project Objectives
✓ Achieving and understanding of the nature and scale of the
loan shark problem
✓ Reducing the incidence of illegal money lending
✓ Addressing the climate of fear that works against reporting
✓ Changing the perception that lenders can operate with
exemption from punishment
✓ Supporting victims in finding viable alternative sources of
credit following the removal of an illegal lender
The legal bit
The law: Financial Services & Markets Act 2000
Local Trading Standards and the Financial
Conduct Authority regulate all licensed
The IMLT look at unlicensed (illegal) lenders
The Loan Shark Definition
•  A person who, not being the holder of a licence,
lends money (lending in the course of trade or
business) and charges interest, especially at an
exorbitant high rate.
•  “Running an unauthorised business
under the Financial Services and
Market Act 2000”
Hosted by Birmingham
City Council
•  When we think of loan sharks many of us will conjure up
images of
baseball bat
wielding thugs
or gangsters in
Hosted by Birmingham
City Council
The LIAISE Officer role is
•  Giving victim support
•  Providing in-depth training, attending team meeting talks/
•  Providing materials for community events
•  Talking to vulnerable groups, service-users
•  Inputting Illegal Money Lending into on your Financial Inclusion
or Community Safety Strategy
•  Distributing flyers and posters to raise awareness
•  Writing newsletter or website copy
•  Responding to new and changing trends
•  Supporting ‘Proceeds of Crime Act’ spend
•  Working with you to target areas ‘at risk’
•  Develop new ways of getting our message to your clients
Who is affected? Es&mated 310,000 UK households using illegal money lending This equates to 12% of households in the most deprived areas Convert households to people and that is about 732,000 men, women and children living in the shadow of loan sharks People repay £700 million per year to loan sharks The Victim
Previous research suggests that a person taking an illegal loan tends to be:
•  At a vulnerable stage in life
•  On tight budget margins
•  In deprived, low-income areas
•  Over 50% of victims have exhausted all legal credit
•  Around 30% have drug, alcohol or mental health
Typical characteristics
No credit agreements (no forms or paperwork)
No receipts for payments or payment books
Most payments are cash and weekly
Violence and or/intimidation – threats
Often work alone, or have a tight group of
•  May suggest other forms of payment
•  Can take securities – cash cards, passport
•  Rarely advertise
Research – Relationships between Illegal
Money Lenders and their Clients
Close knit communities, hostile to outsiders
Average of 3 illegal lenders per community
Build business through social networking
Control the environment through fear and
intimidation – ensuring paying them priority
•  Rely on desperation
•  Violence, threats of violence, blackmail, sexual
The Myths
•  Unlicensed money-lending is not illegal;
It is – you must have a Consumer Credit Licence from
the FCA
•  If you borrow from a loan shark you are breaking the
Not true! It is the loan shark who is breaking the
You have to pay back what the loan shark says you
Not true! – a loan made by someone without a licence
is unenforceable
Hosted by Birmingham
City Council
The Myths
•  It’s a victimless crime;
Not true! Threats, bullying, intimidation – loan sharks
will use force. Victims can also get involved in petty
crime to pay back their loan
•  Loan Sharks are offering a reasonably priced service to
people who need it;
False! On average, a Loan Shark charges three times
the cost of a legal money lender. Interest rates of
between 8,000% and 131,000% have been
The Enforcement side
•  Prosecute Loan Sharks
•  Manage the hotline 24/7 0300 555 2222
•  All Investigators are from Police, fraud, Trading
Standards and customs backgrounds
•  Seconded Police Officers
•  Financial Investigators who use the Proceeds of
Crime Act (POCA)
•  An Intelligence Cell
Loansharks identified
Loan shark behaviours
•  Building a client list through social networking –
the pub, schools gates, taxi rank, through
•  Can be claiming benefits
•  Often not paying any tax on their income
•  Involvement in other criminality, and interest
fuels capital for this
Loan Shark profile
Of our prosecutions, 80% male, 20% female
The friend of a friend “pay me back whenever”
The work colleague
The advert in the paper
The rented debt
The cage fighter
The 80 year old woman
The “community lender”
The “lazy” lender
And our victim profile…
Men and women equally likely to be victims;
The male taxi driver
The single mum
The hospital worker
The self-employed male
The desperate
The businessman
The vulnerable
Why do people borrow?
•  41% borrowed because they were desperate
and needed to pay for emergency expenditure
(such as funerals), rent, bills or existing loans
•  19% borrowed for household items
•  20% borrowed for Christmas, holidays or
•  15% borrowed for drug or gambling addictions
•  5% borrowed for business costs
•  85% found the loan shark through a friend, family
member or because the lender was just well known
in the local community
•  46% had borrowed before
•  47% knew Loan Shark before borrowing
•  35% tried to borrow elsewhere first
•  68% had other debts (average £4,752)
•  29% had debt counselling in the past
•  52% considered the Loan Shark a friend!!
Why do people not get help
They don’t realise help is available
They are too afraid to seek help
They have been threatened with violence
They are already victims of violence
Language Barriers
Fear of getting themselves into trouble
Fear of getting their friends into trouble
Hosted by Birmingham
City Council
IMLT achievements to [email protected]
Over 321 prosecutions
Over 2,000 more Loan Sharks identified
Over 24, 907 victims have been helped
Over £62 million illegal “debt” wiped out
Over £28 million worth of assets being
•  Prison sentences totalling over 212 years for
illegal money lending and associated crimes (plus
Indeterminate Sentence for Public Protection)
0300 555 2222
The hotline is open 24 hours a day
Every single day
Managed by Investigators, on a rota
Can be anonymous
Calls not recorded
Is confidential
Calls from a variety of individuals and agencies
Email and text service too
Free Lesson Plans
for those working with young
Spending starts early
}  Financial skills are lacking
}  Debt is mounting
We should raise awareness & give support
}  Schools, parents and students all think
financial awareness and avoiding dangers
should be taught
The IMLT schools package
•  Materials for use in primary & secondary
•  Designed to raise awareness in pupils of
safer borrowing & money management
•  Key Stage 1, 2, 3, 4 & 5
•  Pfeg marked
•  Written by teachers
•  Pupils will take the messages home to
help their parents who may be in financial
•  Prevent parents using illegal money
•  Enabling better decision making in the
•  Activity based
Activities & learning
Explore where money comes from
Safer lending
How money makes us feel
What things really cost
The role of saving
Want & Need
Dangers of sharks
IMLT needs you.. How to contribute…
IML Message on Answer machine recordings
To be included on training programmes
To provide advocate training for all staff
For Org’s to carry the Loanshark message in their policies
To have the IML branding attached to your website, intranet
& official inclusion documents etc.
To find innovative ways of spending Proceeds of Crime
(poca) and getting our message to your audience
Project work regarding inclusion and promotion on joint
Weeks of Action
Implementing Lesson Plans
Keep talking about innovative ideas of raising awareness.
A final reminder:
To pass information to the team you can:
•  Call the hotline on 0300 555 2222(Free from
mobiles including inclusive minutes)
•  E-mail:
[email protected]
•  Text ‘Loan shark (+ your message)’ to 60003