Two projects funded by the Government to tackle loan sharks have identified over 200 illegal lenders and saved more than £3 million from the pockets of their victims. Their success means that the Government will be extending the teams to cover every region of the UK. Visiting the Birmingham project Consumer Minister Ian McCartney said; "The message to loan sharks from this report is clear: we are coming for you, we are going to shut you down and we will prosecute you. The loan shark teams are doing a great job helping to rid communities of these parasites.
(Media-Newswire.com) - Two projects funded by the Government to tackle loan sharks have identified over 200 illegal lenders and saved more than £3 million from the pockets of their victims.
Their success means that the Government will be extending the teams to cover every region of the UK.
An evaluation published today shows that the projects in Glasgow and Birmingham have;
* identified over 200 illegal lenders;
* carried out 111 investigations;
* saved around £3.3m that would otherwise have been paid out by some of the poorest people in the UK;
* 19 cases in court or in the prosecution pipeline;
* recovered £1m from assets of illegal lenders with £1m more likely to be collected pending court cases; and
* benefited 1765 victims of the loan sharks.
Visiting the Birmingham project Consumer Minister Ian McCartney said;
"The message to loan sharks from this report is clear: we are coming for you, we are going to shut you down and we will prosecute you. The loan shark teams are doing a great job helping to rid communities of these parasites.
"Loan Sharks are the lowest of the low. They exploit people's desperation and will think nothing of using violence against their victims including young mums and disabled people. In Birmingham two thugs who kidnapped and beat their victim will shortly appear in court.
"We are determined to put these people out of business and that's why we are going to fund more teams across the UK. Their work will give a voice to people previously too scared to report the loan sharks who make money out of misery."
Cases the team deal with often involve other crimes. The teams have unearthed crimes including kidnapping, counterfeiting, assault, wounding, blackmail and sexual intimidation. They have also:
* recovered counterfeit goods to the value of £100,000; * seized 34,850 smuggled cigarettes; * recovered 12 firearms, CS gas and significant amounts of ammunition; * found Cannabis and amphetamines; and * seized cash amounting to £29,170.
Treasury Minister Ed Balls said:
"This report sheds new light on the excellent results achieved by dedicated teams in bringing loan sharks to justice, and recovering victims' assets. As the Government announced last month, rolling out these projects will provide an opportunity to crack down on illegal lending practices across the country and redouble efforts to give victims the support they need."
Getting loan sharks off the street is one part of the work the Government is doing to tackle debt. £47.5 million has been awarded to train 500 face-to-face debt advisers as well as £36 million to increase access to affordable credit through credit unions.
2. Two pilot teams were established by the DTI, working with local Trading Standards offices in Birmingham and Glasgow, in September 2004.
3. The Government has committed a further £1.2 million to continue the Birmingham and Glasgow projects for a further year and to extend the operations to cover Liverpool, Sheffield and West Yorkshire. The Government has also committed to roll out the project to the rest of England and Wales in 2007-08.
4. Research published by the Department of Trade and Industry ( DTI ) in December http://www.dti.gov.uk finds that the specialist teams have had considerable success in tackling illegal lending. The research also shows that the UK, with its efficient and diverse financial services market, has a low incidence of illegal lending compared to other European countries. Nevertheless, approximately 165,000 households in the UK use illegal money lenders. As many as half of these are in the poorest parts of the country, often concentrated in the most deprived urban housing estates, where legal alternatives are hardest to access. The projects focus on these areas.
5. Illegal moneylenders operate primarily in urban areas with high proportions of rented accommodation and target the most vulnerable, such as single mothers on benefits, drug addicts and people with mental health issues. Investigations into illegal money lending have also uncovered offences relating to benefit and mortgage fraud, blackmail, drugs, firearms and counterfeit goods.
6. .A strategic cross-government approach to consumer debt was set out in 'Tackling Over-indebtedness: Action Plan 2004'. Progress against the report was set out in "Tackling Over-indebtedness: Annual Report 2006" published in September. The strategy is working to minimise the number of people who become over-indebted and improve the support and processes for those who have fallen into debt.
7. The Government's strategy for financial inclusion focuses on the three priority areas of access to banking, access to affordable credit, and access to free face-to-face money advice.
8. As part of this strategy, the Government has allocated £36 million in third sector lenders such as credit unions and Community Development Finance Institutions, to increase the supply of affordable and appropriate credit for the financially excluded.
9. The Government has also allocated £47.5 million to a DTI project recruiting and training 500 new money advisers to increase the availability of money and debt advice for those who need it most.
Department of Trade and Industry 7th Floor 1 Victoria Street London SW1H 0ET Public Enquiries +44 ( 0 )20 7215 5000 Textphone +44 ( 0 )20 7215 6740 ( for those with hearing impairment ) http://www.dti.gov.uk
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