FIFE COUNCIL
Community Safety Committee
18 May 2005
Agenda Item No.
SCOTTISH ILLEGAL MONEY LENDING UNIT (SIMLU)
1.0
PURPOSE
1.1
To advise members of a project to tackle illegal money lending in Scotland and to seek
approval to authorise activity in Fife, should the need arise.
2.0
BACKGROUND
2.1
For many years there has been wide scale evidence of illegal money lending operations
throughout the United Kingdom. The Consumer Credit Act 1974 establishes a
comprehensive code of regulation for the supply to individuals of credit throughout the
United Kingdom. It provides for the licensing of those who are involved in granting
consumer credit and controls such things as the form and content of agreements, the
way business is sought and transacted and it places the duty on a local authority to
enforce its provisions.
2.2
In Scotland, the former Strathclyde Regional Council had teams of officers operating
within that region who took action against a number of illegal moneylenders, particularly
in the Glasgow area. Following local government reorganisation in 1996 the teams
were disbanded and little proactive work has taken place since then.
3.0
DTI FUNDING
3.1
In 2003/04, the Department of Trade and Industry (DTI) announced it was providing
funding to set up two teams to combat the problem of illegal money lending, one in
Birmingham and one in Glasgow. The Glasgow based team, whilst being located within
Glasgow City Council, has a Scottish-wide remit and has already taken action in various
parts of Scotland, where the need has arisen.
4.0
THE UNIT AND ITS WORK
4.1
The Glasgow Unit is made up of 8 experienced officers with extensive knowledge and
experience of dealing with money laundering, illegal money lending and fraud in
general. Their backgrounds include Trading Standards, Police, Benefits Office, etc.
The Unit is based in the Glasgow City Council Trading Standards Service.
4.2
Consumers who are often excluded from the normal sources of credit because of poor
credit history, an inability to manage finances or because of their low income often
resort to illegal money lending. Loan sharks are unlicensed and operate entirely outwith
the provisions of the law. Interest rates are usually exorbitant and failure to repay can
lead to threats of violence. As such, the operation of illegal money lending creates
offences under the Consumer Credit Act.
4.3
In order to be effective and to operate throughout Scotland, officers within the Unit need
to be authorised to operate in areas where illegal money lending is taking place and/or
suspected of taking place.
4.4
Whilst the officers within the Unit are authorised to operate within the confines of
Glasgow City Council, their authorisation will not extend beyond its boundaries, unless
authorised to do so by any authority in whose area their services are sought. This
report therefore seeks approval for officers within the Unit to be authorised to operate in
Fife if evidence of illegal money lending is received.
4.5
If any action is necessary in Fife, there will be liaison between the Trading Standards
Service and the SIMLU. Publicity has been widespread throughout Scotland and each
authority has been provided with posters to display within their areas giving a
Crimestoppers freephone and a local contact number.
4.6
No investigations into the activities of an illegal moneylender will take place in any area
of Scotland without the express agreement in writing of the relevant Head of Trading
Standards and a protocol has been agreed between the Society of Chief Officers of
Trading Standards in Scotland to ensure this happens.
4.7
The protocol covers:• Working practices for the Project Team when outside the City of Glasgow
• The mechanisms whereby Scottish Authorities are updated on the progress of the
project
• The exchange of intelligence and information between the Project Team and other
Trading Standards staff throughout Scotland.
Should evidence of illegal money lending in Fife be received, contact will be made with
the designated contact officer of the authority before any action is taken.
4.8
Whilst there would be liaison between the Trading Standards Service and officers of the
Project Team, where potential offences are discovered these will be reported to the
Procurator Fiscal by the Project Team.
4.9
If enforcement action results in the removal of an illegal moneylender from an area, it
will be the responsibility of that authority to advise the community and other agencies of
the effect of such action. The Social Inclusion Unit within the Scottish Executive has
apparently been very supportive of the work of the Project Team and acting in
partnership with them has helped those in the clutches of illegal moneylenders. This
has been done in association with other work to highlight access to alternative legal
sources of affordable credit, such as Credit Unions.
5.0
AUTHORISATION
5.1
Authority is therefore sought by the Head of Trading Standards to so authorise any such
officer(s) of the SIMLU to operate in Fife under the Consumer Credit Act and/or other
appropriate legislation that is delegated to him to carry out on behalf of the authority.
5.2
Should it also be necessary to conduct surveillance or use a covert human intelligence
source, as defined within the Regulation of Investigatory Powers (Scotland) Act, the
Head of Trading Standards also seeks authority to so authorise this activity.
6.0
RECOMMENDATION
6.1
(i)
The Head of Trading Standards be delegated to authorise any officer(s) of the
Scottish Illegal Money Lending Unit to operate in Fife under the Consumer Credit
Act 1974 and/or other appropriate legislation; and
(ii) The Head of Trading Standards be delegated to authorise the use of a ‘source’ or
‘conduct surveillance activity’ to officer(s) of the Scottish Illegal Money Lending Unit
under the Regulation of Investigatory Powers (Scotland) Act, if and when they are
requested to operate in Fife.
NEIL EDWARDS
Head of Trading Standards
Kingdom House
Kingdom Avenue
Glenrothes
KY7 5LY
25th April 2005