The Treasury has announced funding of £1.2m to provide extra enforcement teams to tackle the problem of illegal money lending as part of its work into promoting financial inclusion.
The funding aims to build on pilot projects in Birmingham and Glasgow by extending operations into areas such as Sheffield, West Yorkshire and Liverpool.
Over the last two years, two pilot specialist teams in the West Midlands and Scotland have been working to tackle criminals who illegally give out quick cash loans, often using intimidation and threats of violence to extort large sums of money in return.
A report from the Department of Trade and Industry reveals there are approximately 165,000 households using illegal money lenders in the UK, with around half of these in the most deprived areas.
The report estimates the total value of advances made by illegal money lenders to be around £40m each year, with repayments totalling £120m each year.
The majority of areas most at risk from illegal lending appear to be in Scotland, the North and the West Midlands, although pockets also arise in the South (Newham, Tower Hamlets, Portsmouth and Plymouth) and in Wales (Swansea and the Rhondda).
Ian McCartney, trade and industry minister, says: “Loan sharks prey in the poorest people in our communities and use threats and violence to intimidate the people they are ripping off. These people are the lowest of the low and the pilot projects have done a fantastic job in getting loan sharks behind bars where they belong.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
Staying invested could prove lucrative
Consider lasting powers of attorney
Less environment, more governance threatens to undermine firms' green credentials
Evidence your compliance