Awareness training fishes for loan sharks

Evidence suggests that illegal money lending is on the rise as a result of the tough economic climate and rising unemployment.

The first training session provided by the Illegal Lending Money Team raised awareness of how to spot illegal lending activity and how to report it.

A loan shark is someone who lends money without the licence required by the Consumer Credit Act 1974. Interest charged on illegal money lent can run at over 1,500% APR, with violence and intimidation used to ensure that victims pay up. It can be almost impossible for vulnerable victims to pay off the original sum loaned. It is a criminal offense to operate without a licence, with a maximum sentence of 2 years in prison.

Research shows that those most affected are likely to be female between 30 and 40 years old, claiming welfare benefits and living in social housing. Signs to watch out for in typical loan shark activity include no formal agreements being made with victims, loans to the under 18's, no receipts or payment books and the extortionate interest charges. Loan sharks never advertise and tend to find their clients by word of mouth. Victims often experience a rapid change of attitude when a repayment is missed.

Cllr George Duggins, Deputy leader, Coventry City Council said, "this training is timely, given the current economic context and the financial pressures that Coventry's residents can find themselves facing. The term "Loan Shark" is an apt one for those who prey on the most vulnerable in our city and this awareness training for many of the city's front-line staff will help in the fight against this illegal activity."

An event is also planned called "Money Matters" which takes place on 17 February in Jardine crescent, Tile Hill. This public event will provide free advice and information on a range of money-related issues, including paying bills, jobs and how to spot a loan shark.