The campaign encouraging people to STOP LOAN SHARKS goes live across Scotland today, with posters in washrooms, adverts on bus shelters and across a variety of Scottish radio stations. The campaign, funded by the Convention of Scottish Local Authorities (COSLA), asks people to report loan sharks operating in their local communities.
Estimates say that there are over 200 active loan sharks in Scotland, with the actual number probably much higher. However in 2012, only 34 calls were made by members of the public to report loan shark activities. Loan sharks ruin lives and scar communities - they can charge exorbitant interest rates on loans which they often never allow their victims to fully repay.
They leave many victims paying up to a half of their weekly income (often from benefits) to loan sharks to service their debt. If they can’t repay, they can be subjected to violence or forced to grow or traffic drugs to pay off their debt.
It is vital that local communities, agencies working with vulnerable people in places where loan sharks are known to operate, friends, families and the victims themselves pass on any information, in confidence, to ensure that illegal money lenders can be stopped. A lack of information is preventing more being done to stop this evil practice.
Councillor Stephen Hagan, Chair of COSLA’s Consumer Protection Task Force, said: “Times are hard for some of the most susceptible members of our communities, money is tight and they are struggling to budget for the basics of life. There are organisations that can help and the last person anyone should turn to for support is a loan shark.
“Illegal money lending is already a significant problem today across many parts of Scotland and with changes being made to welfare benefits, more and more people may turn to these illegal loans rather than local credit unions or other avenues where money advice is available to solve their budget or debt issues.
“Scottish councils, working through the Scottish Illegal Money Lending Unit, are urging members of the public to call in and report loan sharks who are operating in their local areas. These individuals illegally lend millions of pounds a year across Scotland and through intimidation and a culture of fear they can wreck lives and damage entire communities. A loan shark is not your friend, report them in confidence.”
Margaret Lynch, CEO for Citizens Advice Scotland commented: “In today’s tough economic climate I would urge consumers to take expert advice from a local Citizens Advice Bureau instead of turning to a loan shark. Alternatively they can look at other sources of funding, for example from a local credit union. Those who are currently victims of a loan shark, please come forward and seek help and advice and, where possible, pass on information that can be used to help secure a conviction.”
Borrowing money from an illegal money lender is not straightforward. For example, someone borrowing £100 will typically owe £125 a week later. Interest will continue to be charged at £25 on the outstanding amount. Paying the loan back at a rate of £30 per week means it will take 14 weeks to pay off the original £100 and the total paid to the loan shark will be £420. As basic income support is £71 a week, for a typical borrower this equates to paying nearly half their income to the lender. The APR for this example is 60,221,341.1%
To make it easier to pass on information, The STOP LOAN SHARKS campaign has a phone number, text and website to help people in Scotland make a report in confidence.
To report a loan shark in confidence, please call: 0800 074 0878 or text: 60003. For more information, please visit www.stoploansharks.org.uk