Question: I am a disabled lady who lives alone. I don’t receive much Personal Independence Payments (PIP) and sometimes struggle to get by. My son told me about a man he works with called Gary that does cash loans for friends of friends.
I decided to borrow £550 from Gary to buy a new electric bed. He came round my house the next day to deliver the cash in person. I made an agreement with Gary that I’d pay him £55 every week until the loan was repaid – that was back in March. I’ve now paid him more than what I borrowed and he’s still demanding money.
Gary text me yesterday to say I still owe him £200 and that’s not including the interest on top. I have never been given any paperwork or receipts when paying him back. When I told Gary that I couldn’t afford to keep making the repayments, he told me to pay up otherwise my son ‘will pay the price’. The threats have also continued over text message; Gary said if I don’t pay him next week, he’d come take my bed away and take me to court. I’m too scared to even leave my house because I’m worried I’ll bump in to Gary in the street. My son doesn’t even know I’m in this situation. What should I do?
Answer: Gary sounds like a loan shark. You mention you have never been given paperwork when first taking out the loan or when making the repayments to Gary; these are common tactics used by loan sharks.
Loan sharks often provide little or no paperwork on loans; leaving borrowers in the dark as to how much they owe, the interest rates being charged, and the amount of time they have to pay the money back.
You say that the loan shark has threatened you by saying your son will ‘pay the price’ if you don’t pay him back. Loan sharks will say anything to make sure you keep giving them money – threats aren’t unusual.
Loan sharks act outside the law and this Gary has no legal right to recover the debt. In fact, Gary has no legal right to make you pay back money at all – because the loan is illegal.
The England Illegal Money Lending Team (IMLT) are a national team who investigate and prosecute loan sharks. The team run a 24-hour hotline on 0300 555 2222; your call will be handled by a trained officer and all information will be treated in the strictest confidence. You can also report a loan shark online: http://www.stoploansharks.co.uk/report-a-loan-shark/
Before calling the team, you can check the Financial Services Register to see if Gary is even licensed to lend money. You can search by company or person – this shows which individuals and firms are regulated by the Financial Conduct Authority (FCA).
When you call the IMLT, an Investigator will ask some questions about the loan and the repayments and for a description of the loan shark. The team will also ask how they can support you – you will be assigned a dedicated support officer who will answer any questions or concerns you may have and guide you through the process if the case goes to court.
What is a loan shark?
A loan shark is someone who lends money without the correct authorisation from the Financial Conduct Authority (FCA). It is a criminal offence to lend money without authorisation and this is taken very seriously by the courts.
Loan sharks usually appear friendly at first and will act as though they are helping their community; lending money to anyone in the area who may be struggling financially. Although they may seem nice, a loan shark’s behaviour soon changes once someone owes them money.
What do they do?
Loan sharks have been known to act on their own or with others as part of a larger business. They usually receive their custom through word of mouth, but have also been known to advertise their cash loan services on social media. Loan sharks will start off by being your friend to gain your trust, but it’s not long until they are banging at your door and sending you threatening text messages, demanding repayments.
I am a 45 year-old lady who uses a wheelchair; I experience depression and find it extremely difficult to get around the house without my carers’ help. When I have guests come round to my house, I cannot get to my front door to let them in. Instead, I press a button from my wheelchair to open the door. I sometimes feel vulnerable doing this as I am not always entirely sure who is knocking.
In June last year, I contacted the Illegal Money Lending Team after I’d told my carer Leanne about a couple who kept threatening me to pay back a loan I’d already repaid. Leanne had recently received training on loan sharks, so she already knew about the team.
I borrowed £1,300 last January; I’d received a leaflet through my door from a couple advertising quick cash loans. I needed money quickly because I’d fallen behind on rent arrears and so I got in contact with the couple. They sent me the money via electronic bank transfer; the money was in my account the same day.
I was paying the couple back about £300 a month but the repayments just continued and it wasn’t long until I had had enough of being left with no money for myself. I had to get my daughters to pay for my weekly food shopping on several occasions because I couldn’t even afford to put food on the table.
I contacted the Illegal Money Lending Team and explained my situation. I gave them a detailed description of the couple and told them where they worked – I found out this information from my care assistant.
The IMLT investigated the couple and found that they were not authorised by the Financial Conduct Authority to lend money. The couple had been lending money illegally.
When a search warrant was used at the couple’s home address in 2015, a number of loan books were seized which showed that the couple had been illegally lending money to around 90 other disabled people, mostly old clients from the care home where they worked. The IMLT worked out that I’d repaid the couple over £3,000 on the £1,300 loan.
The couple pleaded not guilty to illegal money lending and money laundering and the case went to trial.
During the trial, I acted as a witness and gave evidence to the court about my experience. The Illegal Money Lending Team applied for and were granted reasonable adjustments to accommodate for my disability; allowing me to do a video link instead of physically attending court for the hearing. They were really helpful and supported me through it all.
The loan sharks were found guilty on all counts by a jury and were both sentenced to prison and ordered to pay £75,000. I have since been contacted by my local Citizens Advice Bureau to help me get my finances back on track.
How to contact the IMLT
The England Illegal Money Lending Team run a confidential hotline (0300 555 2222) which is manned 24/7 by a trained officer. The team can accept information anonymously or in confidence and will talk you through your options and procedures when you make the call. You can also report a loan shark online by visiting www.stoploansharks.co.uk/report-a-loan-shark/