Thursday, 23 August 2012

Illegal Money Lending in Lancashire - Trading Standards

With the recent issue of legal loan sharks (and bookmakers with fixed odds betting terminals FOBT) I have asked LCC trading standards to provide a note on illegal money lending and what LCC is in the fight against these despicable people who use violence and intimidation to fleece the poorest and most vulnerable people in society.


Money lending is a regulated activity and is governed by the Consumer Credit Act 1974. The purpose of the Act is to ensure that individuals engaged in this activity are fit and proper (no convictions for fraud etc) and can comply with the rules. They are issued a licence to operate by The Office of Fair Trading who administer the licensing regime and have the power to refuse applications or revoke licences.
Money lending is an activity that is policed by Trading Standards.

The Illegal Money Lending Team (IMLT) was set up by the Central England Trading Standards Authority (CenTSA) in 2004 and was extended to cover the North West in 2007.

The overall aim of this specialist Trading Standards team is:

To protect communities from illegal money lending by identifying, investigating and prosecuting illegal lenders and supporting their victims in the transition from financial exclusion to financial inclusion

In the UK an estimated 310,000 households owe money to illegal money lenders repaying approximately £120million per year, money stripped from the legitimate economy and used to fund serious organised criminality. Although not exclusively the case, loan sharks tend to be concentrated in areas of social deprivation where there is a credit vacuum.

The victim profile for illegal money lenders tends to be females aged 30-40 on welfare benefits living in social housing.

Potentially almost 5,000 people (6%) of Hyndburn could be victims of loan sharks however the figures quoted here are only conservative estimates due to the fact that illegal money lending largely goes unreported. The majority of victims fail to report their situation either through ignorance of the law or fear and intimidation generated by a perceived or actual experience of physical, mental and sexual violence.

People engaging in illegal money lending tend to do so as part of wider criminal activity, including gun and knife crime, drug dealing and counterfeiting.

So far nationally the IMLT have:-
  • • Identified over 1,750 loan sharks
  • • Assisted over 16,000 victims
  • • Encouraged victims to open 700 new savings accounts
  • • Wiped out over £38,800,000 of illegal “debt”
  • • Secured prison sentences totalling over 107 years
  • • Seized & confiscated more than £1,500,000
  • • Confiscation proceedings ongoing for over £27,000,000 of criminal assets
  • • Over 2,000 frontline staff trained in supporting victims of loan sharks
Timeline of Activity

Illegal Money Lending Team (IMLT) launched in Lancashire.

Hyndburn BC invited to attend launch event at Police HQ. Illegal Money Lending Team promotional material branded with the Hyndburn Community Safety Partnership logo.

DWP Financial Inclusion Champion establishes Financial Inclusion Group for Hyndburn – partnership with local agencies such as Hyndburn Borough Council, Hyndburn Credit Union, Surestart Hyndburn, Hyndburn Homes etc as well as County and National bodies in order to identify and facilitate access to appropriate sources of advice, credit, other services and support.

Financial mapping of Hyndburn completed, clearly indicating the areas of financial exclusion.

Presentations and offer of training were given to the Hyndburn Community Safety Partnership by Lancashire Trading Standards and the LIAISON officer of the IMLT.


Hyndburn Homes are a campaign partner of the IMLT resulting in enhanced support and training for front line workers engaged in supporting and assisting local residents. Discussions are ongoing for Hyndburn Homes to sign the housing protocol and victim charter

The Housing Protocol is an agreement between the Illegal Money Team and the housing provider which highlights the issues surrounding illegal money lending, explores how and why agencies should work together to tackle the issue and identifies the benefits of a coherent joined up approach.

76% of victims live in rented accommodation (50% in council or housing provider stock and 26% in private rented accommodation). There is evidence to suggest that tenants are sometimes specifically targeted by illegal lenders.

Benefits of this joined up approach for housing providers includes the potential for: -
  1. Reduced rent arrears (tenants are not paying the illegal lender any more)
  2. Reduced abandoned tenancies (tenants do not flee properties in fear of the illegal lender)
  3. Reduced anti-social behaviour (including graffiti on property and neighbourhood disputes)
  4. Reduced crime
  5. Increased desirability (areas are seen as more desirable because of the above factors)
  6. Helping build a picture of what is going on in the area
  7. Trained staff working towards financial inclusion objectives
The victim charter is a set of provisions detailing the service victims can expect from agencies who have signed up to it.

You do NOT have to pass information to the team yourself. Someone else can do it for you. Your housing provider could be your point of contact with the Illegal Money Lending Team (IMLT).

You do not have to provide your name or contact details, although it is helpful in case our investigators need to check something with you.

You do not have to give a witness statement, you can choose to give the information anonymously if you like.
You can meet with a Financial Inclusion Partnership Officer (FIPO) who will guide you through the process of giving information to the team and help you decide whether to pass on information or give a statement.
We will treat you as an individual, work with you, keep you up to date with each stage of the investigation process and take your views into consideration.

We will help you access local support that is relevant to your needs such as affordable credit, debt advice, maximising your income etc.

One to one support will be provided for you – you will be given a named contact with their details so you can speak to a member of the team when you require.

If you chose to give a statement you may be called to be a witness in court. If this happens, you will be treated with sensitivity. As well as one to one support from your FIPO you will be offered the support of the Witness Service who will provide staff and trained volunteers to help you, your family and friends at the court before, during and after the trial. The team will provide transport to and from court, and will offer you the chance to have a look around the court before the trial if you want to.

We will listen to your concerns; and work with others to keep you safe.


Anyone who thinks they have been the victim of a loan shark can get help and assistance via the confidential help line.
  • Anyone with information or who wishes to report a loan shark can also do so via the confidential 24/7 help line:-
  • Tel: 0300 555 2222 (local rate call, including inclusive minutes from mobiles)
  • Web:
  • Text: loan (space) shark (space) + message to 60003
Since operations started in Lancashire enforcement action has been taken against six loan sharks. There are currently three operations underway within the county.

A victim has summed up this initiative as:-

“Contacting the Illegal Money Lending Team saved my life. Were with me every step of the way and I can’t thank them enough. I was at my lowest point, working night and day to pay back the loan shark. With their support, I’ve now been able to turn my life around and I’m happier than I’ve ever been.”

Trading Standards