Follow Us on Facebook Follow Us on Twitter Follow Us on Google+ Follow Us on Pinterest Follow Us on Tumblr Visit our YouTube Channel Subscribe to our Feed Subscribe via FriendFeed

Connect With Us

Beware Of Loan Sharks Says Manchester City Council

by Jim ONeil on December 19, 2011

in loan sharks

Christmas is a time when many people need extra cash. Some lenders are more than willing to provide it but not all are reputable. Residents of Manchester, England, have been warned by city council executives to avoid dealing with illegal loan sharks. Instead, they should use legitimate funding sources like banks and the Manchester Credit Union.

Consumers will get the money they need, while avoiding high interest rates and possible violence.

Nigel Murphy is the city council executive member for the environment and he issued a warning to loan sharks. Referring to them as “violent criminals,” he vowed that their illicit behavior would not be tolerated. Too often, loan sharks deal in local communities, preying on residents with money issues.

They may initially seem friendly, offering a sum of cash to help consolidate debt or pay bills, but the relationship soon becomes ugly and borrowers are pressured into repaying the money.

Those who lend money illegally rarely use paperwork, keeping customers in the dark regarding interest charges and late payment fees. According to Sara-Jane Lynch with Trading Standards, some loan sharks require loans to be secured by items like passports.

Others take a benefit, post office, or bank card and its PIN and withdraw money from borrower bank accounts themselves. These borrowers are often left with little, if any, money for living expenses.

As communications officer on the Illegal Money Lending Team for Trading Standards, Ms. Lynch has experience with these illegal lenders. She stated that when borrowers are not able to repay a loan, many loan sharks turn from nice to mean.

They employ tactics like intimidation, threats, and even violence against borrowers, in attempts to get money. In addition to a high loans APR, borrowers are burdened with constantly watching their back.

Since its establishment in 2004, the Illegal Money Lending Team has taken actions that resulted in over 190 prosecutions leading to 117 years of custodial sentences. Experts estimate that approximately 310,000 UK households are currently customers of loan sharks.

In the weeks before Christmas, illegal money lenders increase their customer base by 20 percent, according to research. Many watchful eyes are cast in the direction of the industry during this time of year.

Edward Davey, Department of Business consumer affairs minister, said that loan sharks are “pure and simply…criminals.” He referred to their use of “intimidation and violence” to “fleece”  consumers out of cash. The government continues to fund work performed by the Illegal Money Lending Team so these criminals can be brought to justice, said Mr. Davey.

Experts encourage consumers to pursue loans bank and credit unions offer before dealing with illegal money lenders. Cheap loans from financial institutions are the best option but even a more expensive payday loan from a legitimate lender is preferred to an arrangement that is not legal. Local lawmakers will not tolerate actions of loan sharks.

They proved this in 2009, when John Kiely was sentenced to five years in jail for illegally lending money to approximately 1,200 people in east Manchester.

Comments on this entry are closed.

Previous post:

Next post: