Lancashire families plunged into debt by the pandemic could be targeted by unscrupulous loan sharks who have turned to social media
The Covid-19 outbreak has meant loan sharks have been unable to find and snare their victims at traditional places such as the pub or the school gates.
So now they are adapting to alarming new tactics on social media to plug their illicit activities.
In one case a criminal paid a Snapchat ‘influencer’ to promote their illicit loans, while in another loan sharks have befriended vulnerable women on dating sites.
Loan sharks are illegal, unlicensed money lenders that charge high amounts of interest even on short-term loans.
They target people who are in desperate financial situations and, while they may seem friendly at first, they often resort to threats, intimidation or violence to get their money back.
Their victims end up paying far more back in interest than they would through any legal borrowing, and they are sometimes pressured into getting further loans to cover the debt.
People who need to borrow money but have a bad credit rating or have been turned down by their bank, may find themselves in the position of turning to a ‘loan shark’.
Lancashire County Council granted authorisation in 2008 for England’s Illegal Money Lending Team, overseen by Birmingham City Council, to investigate and institute proceedings against illegal money lenders operating in the county.
Birmingham was chosen to lead the national team due to savings efficiencies as most local authorities, including Lancashire, were not able to provide the level of specialist resource that the centralised team could.
The Illegal Money Lending team’s LIAISE Manager, Cath Williams, is based in the North West.
She manages a team that supports victims and witnesses, raises awareness, and helps to generate intelligence in local communities about illegal money lenders.
She explains: “ In some cases it has got to the point where loan sharks are telling victims they will send men around to be ‘paid in kind’ to help pay off their debt.
“Nationally we know of cases where victims have been almost blackmailed via social sites like Grindr, used by the gay community, by criminals threatening to download and share private photographs.
“People start off believing these people are their friends.
“In the past in Lancashire we have seen loan sharks that lend mainly to their local community, such as the Thornton postman who lent to people in Thornton, or an Euxton man who lent to people in the Chorley area.
“But on the internet you can have a loan shark in Cornwall lending to people in Lancashire - it extends their reach significantly.”
The authorities believe loan sharking is vastly underreported.
Initial estimates a decade ago suggested around 3,000 Lancashire households had borrowed from loan sharks - but this is feared to be wide of the mark.Cath says the real impact of the pandemic on loan sharking activity in the county may only become obvious in around two and half years time, as that is the average time it takes a victim to gain the confidence to report it.
She recalls: “One of the biggest things that has changed in my time is that a victim isn’t the stereotype of a single mum on benefits anymore. One in five victims are home owners.
“Because of the way they operate, many victims think they’re just borrowing from a mate at first.
“ I think there is a big idea in the North West that you ‘don’t grass’, and that you sort problems out yourself.
“Most victims say they ‘got themselves into it’, but you wouldn’t say that if you were burgled.”
As the financial impact of Covid-19 continues to bite, victims have reported lenders becoming increasingly unforgiving as people’s circumstances change.
People who have been borrowing for years from the same loan shark are suddenly finding they are reducing the times between repayments.
Victims are often unable to use a phone helpline as they may be isolating with partners and family who are unaware of the debts, and so the IMLT’s Live Chat function, on which callers can be anonymous, has been inundated.
The county’s courts have seized thousands of ill gotten gains back from loan sharks in the last 10 years, of which a sixth is given back to the IMLT to cover their costs.
Some of that pot of money is made available to community groups to help raise awareness of loan sharks.
The Community Outreach group in Leyland received £2,870 to help the community design and commission a hard hitting mural on the community centre, while Lancashire Women, which helps domestic violence, victims, has received £2,500 to help ensure vulnerable women don’t fall prey to loan sharks.
*Spotted an advert online for a quick cash loan or bank transfer with no checks or paperwork? Check the lender is Financial Conduct Authority authorised.
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