Loan shark jailed over illegal money lending

A loan shark and her husband have been jailed for eight months after an illegal money lending enterprise they ran was exposed.

Tuesday, 19th July 2016, 10:57 am
Updated Tuesday, 19th July 2016, 12:59 pm
Preston Crown Court. PIC BY ROB LOCK

Karen Scott, 45, and husband David, 52, of Westhead Road, Croston, near Leyland, were prosecuted by the National Illegal Money Lending Team (NIMLT).

Her mother, businesswoman Catherine Lunders, 64, of Holborn Hill, Ormskirk, was given eight months suspended for two years for similar matters by Judge Pamela Badley.

Preston Crown Court heard they had ran two separate businesses in which they charged exhorbitant interest rates of between 40 and 50 per cent,

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Lunders had started a legitimate business with the correct permits and licences to carry on money lending - but failed to renew the licences in 2012.

Her daughter, who then launched her own illegal money lending business, is reported to have knocked on the door of one man and screamed in the street when he could not keep up his repayments for a £150 loan.

The Scotts both admitted unlawfully engaging in a regulated activity when not authorised, possession of criminal property, and using money collected from unlawful loans to convert into further loans.

Lunders admitted engaging in the activities of a consumer credit business without a licence, two counts of engaging in a regulated activity when not authorised, possession of criminal property, and using money collected from unlawful loans to converting into further loans.

Prosecuting, Simon Mortimer said: “Lunders had previously held a licence in respect of her operation of a loans business known as LA Loans with effect from June 1997. She renewed that licence on June 21, 2002, then again on December 5, 2007. The licence in respect of LA Loans lapsed on December 7, 2012. She did not renew that licence.

“Consequently, by continuing her involvement in the business of providing cash loans after December 2012 she was committing an offence. She must have been fully aware that thereafter she was acting unlawfully.”

The couple had never held a licence, and David Scott, a karate teacher, had been refused an application due to a six-month jail term for abuse of the Construction Industry Scheme by falsifying documentation. But in March 2015, Karen Scott submitted an application to the FCA seeking ‘limited permission’ for a new firm intending to trade as ‘Winds of Change’.

She was advised in a telephone call in August 2015 tshe was not permitted to lend to consumers until her application had been assessed, but had already been providing cash loans for over a year.

The court was told in early 2015, a man was offered an initial loan of £150, delivered by Karen Scott to his flat. He could not repay and she rang him and banged on his flat door and his girlfriend’s door, and “shouted in the street that he owed money.”

On July 8 last year police attended the couple’s then home on Southport Road, Eccleston, and seized documents including 218 repayment cards and a business card in the name of ‘Winds of Change’, falsely claiming the company was ‘in accordance with the Consumer Credit Regulations.’

In November, NMILT officers conducted searches of Lunder’s home and car, and the couple’s new home in Croston, and seized handwritten loan records, repayment cards, spreadsheets with loan customers’ details and payments, and correspondence between Lunders and the Office of Fair Trading in relation to her lapsed licence.

Other documents, including a list of names marked ‘Trouble’ were found in David Scott’s car.

Investigators found the couple operated a money lending business from April 2014 until November 2015, issuing at least 371 loans to 176 people. They advanced £67,235 and received £77,645 repayments.

Lunders continued to operate a money lending business after 2012, issuing at least 151 loans to 60 people - lending out £40,110 and got £47,729 in repayments.