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The crackdown will be led by an Illegal Money Lending Team from
Birmingham City Council in partnership with trading standards
officers from Peterborough City Council.
Trevor Gibson, director of
environment and community services at Peterborough City Council,
quoted research by the Citizens’ Advice Bureau showing that average
household debt in Peterborough was £14,000 – nearly double the
national average of £8,700.
“We want this campaign to wipe out
an illegal industry and put victims in touch with organisations that
will help them put their lives in order,” he said. “It will be a
head-on approach to a very important problem.”
Tony Quigley, who leads Birmingham’s
Illegal Money Lending Team, illustrated the scale of the problem
with film of an actress portraying the experience of a 19-year-old
woman who borrowed £300. She was initially told the loan would cost
£690 to repay at the rate of £20 per week but when she defaulted
after four weeks £300 was added to the debt.
Even after she had borrowed £700
from family members to repay the debt she was threatened and
physically attacked when she refused to pay off the debt of an
ex-boyfriend. When she went to the police further threats forced her
to move home.
He said loan sharks were also
associated with illegal weapons, smuggled cigarettes and counterfeit
DVDs and other goods. The removal of loan sharks permits victims to
manage their finances more effectively and often results in a drop
in reported crime.
Councillor Graham Murphy, the city
council’s Cabinet member for environment and community safety,
welcomed representatives from Citizens’ Advice Bureau, local housing
associations, Credit Union, and the city council’s neighbourhood
investment and benefit teams to the launch.
He added: “This intelligence-led
campaign is extremely important, both for Peterborough’s more
vulnerable residents and in the wider battle against crime. Loan
sharks have been known to extort massive repayment rates – in some
instances as much as 117,000 per cent – that imprison victims in
poverty.
“This project complements many
existing city council initiatives aimed at crime reduction,
community cohesion and neighbourhood investment. It will help
improve the lives of local residents and we hope the public will
come forward with information to assist the team.”
Peter Gell, head of the city
council’s trading standards and licensing team, said: “Illegal money
lenders cause unimaginable distress and sometimes physical harm to
people who already have limited finances.
“They often charge massive interest
on loans and they threaten, intimidate and even assault their
customers to ensure payment. While people who take a bank loans have
guaranteed repayment terms, the victims of loan sharks have no
rights or protection. Loan sharks also deal in cash and are guilty
of tax avoidance on their ill-gotten gains and they may also be
involved in other crimes.”
While a Birmingham-based team will
coordinate the crackdown on illegal money lenders, a
Peterborough-based financial inclusion partnership officer will help
people obtain advice and assistance about obtaining legal and
affordable loans and dealing with debt problems.
To provide information about illegal
money lending activities call 01733 701122; text “loan (space) shark
(space) + Your Message” to 60003; or email
stoploansharks@peterborough.gov.uk
February 2008 -
Peterborough UK Community Website
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