Government To Crackdown On Illegal Loan Lenders

Fri, 21 Sep 2007

A crackdown on illegal money lenders is being planned amid growing concern over rising debt levels, the government announced.

Undercover teams of investigators around the UK will work with Trading Standards officers and receive £3m from the Treasury to find and prosecute loan sharks – who will then be offered support and debt advice .

The new scheme comes amid the current credit market crisis, which could leave more vulnerable borrowers worse off.

The nationwide crackdown comes on the back of the success of pilot schemes in Birmingham and Glasgow, where dedicated teams, staffed by Trading Standards officers, worked to shut down loan books worth £3m and identified over 200 illegal lenders since 2004.

Illegal lenders target the most vulnerable members of society, such as single parents, which can lead to acts of violence if the debtor cannot raise the funds needed to pay back, research suggests.

Government figures show that over 165,000 UK households facing debt problems – mainly living in deprived inner-city areas, borrow from loan sharks each year due to being turned down for legitimate credit and left with no other option.

John Hutton, the Secretary of State for Business, Enterprise and Regulatory Reform, said: "Loan sharks are criminals who prey on vulnerable and desperate people. We are committed to shutting these thugs down and bringing them to justice."

Particular attention will be given to London areas such as Hackney, Newham and Tower Hamlets, while Newcastle and Tyneside in the North East, and Nottingham, Leicester and Derby in the East Midlands, will also be focused on.
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