Government pledges to stop “nasty lenders”

In total, £5.6m of funding will be provided to Britain’s Illegal Money Lending Teams (IMLT) and bodies in Northern Ireland - a 16 percent increase compared to the previous year.

The money will be used to investigate and prosecute illegal lenders, and to support those who have been the victim of a loan shark.

Since the ILMT in England was established in 2004, they’ve made more than 380 prosecutions, leading to 328 years’ worth of sentences, and have written off around £73m of illegal debt.

The government said the Consumer Council for Northern Ireland will lead its first ever education and awareness campaign to help prevent the most vulnerable from being bitten by loan sharks. It also said the Police Service of Northern Ireland will get funding for a specialised officer who will lead on illegal lending within the Paramilitary Crime Task Force.

John Glen, economic secretary to the Treasury, said: “These nasty lenders are nothing more than lowlife crooks taking hard-earned cash from the pockets of the most vulnerable. Over 300,000 people are in debt to illegal money lenders in Britain and they need to know that we’re on their side. That’s why we’re taking the fight to the loan sharks and spending more than ever to support their victims.”

In 2018/19, the government said the England ILMT will spend up to £100,000 in funds seized from loan sharks to incentivise consumers in communities at risk of being targeted by illegal lenders to join and save at a credit union.

However, StepChange Debt Charity said credit unions alone are unlikely to have sufficient capacity or resources to meet the full spectrum or scale needed.

The charity welcomes the government’s announcement, but is calling for more action to be taken on alternatives to high-cost credit more generally.

It said the government needs to consider a wider framework covering those who may not be able to borrow from credit unions, as well as those who can.

Peter Tutton, head of policy at StepChange Debt Charity, said: “Cracking down on the unconscionable activities of loan sharks is a very welcome step. It needs to be accompanied by a twin-track focus on the high cost credit market more generally, to reduce the harm being experienced by vast numbers of households who are forced to borrow to make ends meet.

“Now is the time for the government to explore creative, sustainable alternatives to meet the needs of financially vulnerable households.”