DANGEROUS WATERS
HUNTING THE LOAN SHARKS

The Illegal Money Lending Team

Stakeholders | 22/07/21

The England Illegal Money Lending Team (IMLT) are a specialist unit that investigate cases, prosecutes illegal lenders and provides support for borrowers in need of assistance.

IDENTIFYING ILLEGAL LENDERS
What proportion of the public are able to identify an illegal money lender? It’s easy to spot the clichéd characters we’ve all seen in films and soaps, the ones who generously offer loans only to turn nasty when a payment is overdue. They typically come in two forms, either the 1950’s conman or the slick gangster. However, the IMLT can testify that illegal lenders operate in any area and can look like anyone. They will be a borrower’s best friend only for the dynamic to change rapidly when a payment is missed.

Cath Wohlers, LIAISE Manager with the IMLT says, “The IMLT rely on partners to spot the signs that someone might be involved with an illegal money lender. These signs can include:

•  no official paperwork such as a contract or receipts for payment
• interest rates may fluxtuate dependant on the lender’s mood
•  borrower’s items such as jewellery, passports or bank cards may be kept as security

ILLEGAL LENDING BEFORE LOCKDOWN
Before lockdown, any public place in the local area was a feasible hunting ground for illegal lenders. Communal places such as the school gates, shops, pubs, clubs, bingo halls, and places of worship were all ideal. In reality, illegal money lenders operate in any environment where people come together to socialise.

ILLEGAL LENDING DURING LOCKDOWN
The lockdown abruply closed the usual workplaces of illegal lenders. However, like many of us, they have adapted to working online and social media platforms are their new base of operations. Loan sharks have even turned to online dating sites to target victims.

The IMLT has received reports of illegal money lenders preying on people looking for love online during lockdown. The criminals are setting up dating profiles to lure victims into fake romantic relationships, only to then trap them in a dangerous cycle of debt. One victim was tricked into taking out a loan after telling her new love interest about her financial problems. She initially borrowed £3,000 but her debt soon spiralled out of control. She contacted the IMLT for help when the loan shark demanded £10,000 and sexual favours to pay off her debt.

In other cases, borrowers have told the IMLT they have been blackmailed by loan sharks on social media sites used by the LGBTQ community. The illegal lenders have gone so far as to threaten to share private photographs if the victim fails to pay their debt.

PROSECUTING ILLEGAL LENDERS
As well as prosecuting illegal lenders under the Financial Services and Markets Act, the IMLT will use the Proceeds Of Crime Act legislation to take away criminal gains from illegal lenders. Any money received by the IMLT is then ploughed back into local communities with the aim of preventing people being targeted by illegal lenders. In the last three years over three quarters of a million pounds have been injected into community projects.

LOAN SHARK ORDERED TO PAY BACK £70,000
Vincent Hamilton, an illegal lender based in Crewe, was sentenced to thirty months in prison in August 2019 after pleading guilty to illegal money lending, money laundering and selling illegal tobacco products. At a confiscation hearing on 30th April this year, Hamilton was ordered to repay £70,163 under the Proceeds of Crime Act.

The IMLT and Cheshire East Council Trading Standards brought the case against Hamilton after officers executed a warrant at his home. During the search, they found illicit cigarettes and tobacco with a retail value of £8,116 and cash totalling £7,580. A financial investigation into Hamilton’s criminal activities revealed that he had been lending money illegally since 2012.

ADVICE FOR REGULATED LENDERS
The IMLT want to help regulated lenders identify those who may have fallen victim to an illegal lender. Lenders should be able to identify anomalies on open banking or income/expenditure forms. If the customer is struggling to repay the loan, it may be due to prioritising the repayments to an illegal lender. The IMLT also encourage lenders to revisit past applications that explicitly states the loan is required to pay outstanding debt from an illegal lender.

Cath Wohlers
LIASE Manager
Illegal Money Lending Team