Chris Connor

LIAISE Officer

Trading Standards Illegal Money

Lending Team

What areas do we cover?

• 3 Teams cover

UK

• Scotland

• Wales

• England

ENGLAND ILLEGAL MONEY LENDING TEAM

• Set up in 2004 as a pilot

project

• Hosted by Birmingham City

Council

• Employs 70 members of

staff

• Two distinct functions

investigators and LIAISE

• Agile workers and scattered

across England

Legal Lenders

• Governed by the Financial

Services & Markets Act

• “Permission” required in

order to make a loan

• Various categories

(including debt advice)

• Currently no ceiling on the

amount of interest a legal

lender can charge (apart

from credit unions)

• Pay day lenders from 1/1/15 new

rules – 7% of borrowers will no

longer be able to get a loan (70k)

• Governed by FCA collection

guidelines

• Must show Annual percentage

rate (APR)

• Lasts for 5 years and needs to be

renewed 6 months prior to

expiration

• Reports about legal lenders go to

local trading standards team

Bristol Credit Union

• Deposits are covered up to £85,000 by the Financial Services Compensation Scheme.

• £3.50 required to open a membership savings account.

• Help with budgeting. Rent Direct and budget accounts and a Jam Jar Account to help manage the

transition to Universal Credits. Cash ISA’s and Christmas savings accounts also available.

• Help with affordable low cost loans for various purposes such as moving into a new home, holidays,

electrical products

• Local Service Points currently in the Bristol area

• Up coming work with Bristol Credit Union

• £10 account opening incentivisation

• The incentivisation will be open to residents who live in Bristol and South Gloucestershire areas. A

• £10 voucher will be made available to residents on a first come first served basis to open an account.

• The IMLT will contribute a maximum of £1,000 towards this scheme. The £1,000 contribution has

come from money taken from convicted loan sharks under the proceeds of crime act.

• £10 credit will be applied to the account after 3 months of regular saving can be evidenced

(at least one deposit per month)

What are some typical characteristics displayed

by loan sharks?

• No credit agreements given – “you owe me this much today”

• No receipts for payment or payment books

• Violence, intimidation or threats if repayments are missed

• Loans to young people (under 18’s)

• Can take illegal securities e.g. cash card

• Never advertise – find clients by word of mouth.

• Repayments of at least twice the amount lent, often with very high charges for defaulting

• Personality changes when victim can no longer meet payments

• Could implicate relatives if borrower disappears

Who is affected?

�Estimated 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

Loan Shark Customer

• Often very young, singles and younger single parents

• • Frequently heavily dependent on family support

• • Poor financial skills:

• • Problems with prioritising

• • Difficult to resist temptation

• • Typically history of failed catalogues and home credit loans

• • No engagement with creditors

• • Budget entirely on their full income so frequently left with nothing

• • Sustained week to week by informal lending compromising family and social networks

• • become increasingly desperate for cash to meet essentials

• May say they have borrowed from a “friend”

• May try to hide amounts when completing I&E forms

Anonymous caller v Witness

• Remains anonymous Will need to be signed and person giving it named but no address are

disclosed.

• Will be confidential Will generally be disclosed to the

defence and the court

• Can come via a third party Must be made by the individual

• Can be hearsay Needs to be first hand

• Can be limited information Will be as detailed and factual as possible

• Can be given and then Can be called to give evidence

the person can remain

uninvolved with the team

Those willing to be a witness makes for a stronger case!

Proceeds of Crime Act…

• Two Financial Investigators on the team

• All assets are frozen at time of arrest

• Before raid, agreement is made on how POCA

will be divided

• Money is used to help the affected location

and its residents

• £27m currently being investigated!

Housing Providers

Linking in with Housing Providers

• They have pulled out all the stops when a victim needs to be re-housed.

• They have provided a vital source of intelligence when loan sharks have been targeting their clients.

• Making rooms available for interview

• BENEFITS TO HOUSING PROVIDERS

• Removal of loan sharks can lead to increased rent recovery for housing associations

• Tenancy turnover – decrease in homelessness and abandoned tenancies

• Anti social behaviour – this reduces with a loan sharks removal

• Desirable housing – safer estates can mean easier let properties

Enforcement Difficulties

• a senior Police officer described illegal money lending as “an invisible problem” prior to 2004

• illegal money lending has been seen by some parties, including the Police, as a civil rather than criminal matter

• Prior to 2004 individuals presenting themselves to the Police as having a problem with illegal lenders in the West Midlands would have been referred either to their solicitor or to debt advice, on the grounds that illegal lending was not a criminal issue.

• from a police perspective, we didn’t know

what to do with it…It was a personal

matter

• there was no outlet for intelligence

coming in on illegal money lenders so it

was often missed

FREE Resources available to you

• A national team of LIAISE Officers

• Communications Officer

• Best practice guide for Housing Providers document

• In some instances, POCA

• Posters, leaflets and flyers

• Shark costume

• Inflatable shark

• Banners

Partnership working

• Articles in newsletters

• Taglines on rent statements

• Mailings to tenants

• Information in new tenant packs

• Copy on website and intranet

• Free staff/residents groups training

• POCA Events

• Adding information at community events

• Joint media work

LESSON PLANS

• Primary & Secondary

• Budgeting and financial

literacy

• Can be used in Phse

lessons

• Pfeg approved

• Give an loan shark

awareness message

We hope we can carry on our

successes with your help.

Questions?

0300 555 2222

Christopher.connor@birmingham.gov.uk

Tel 07500809341

Follow us on Twitter @stoploansharks

Facebook –www.facebook.com/loansharknews