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Crackdown on loan sharks


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A three-year crackdown on illegal loan sharks in Peterborough will make significant improvements in the lives of hundreds of families and the communities where they live, it was claimed at the campaign launch on Friday 1 February.

 


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 [email protected]

February 2008 - Peterborough UK Community Website

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