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Loan Sharks

A CAMPAIGN to highlight financial predators, lurking in communities throughout Wales, who target the vulnerable, has been launched in the Senedd this week.

Community Housing Cymru (CHC) and the Wales Illegal Moneylending Unit (WIMLU) have teamed up for their ‘Don’t Get Bitten’ campaign to combat the problem of illegal money lenders.

Every year in Wales, thousands of people turn to illegal money lenders. Recent benefit reforms, including the ‘Bedroom Tax’ and the economic downturn have made the problem worse. Figures from WIMLU suggest a dramatic increase in the number of people in Wales turning to loan sharks. One case alone which WIMLU is investigating involves over 400 victims across the whole of South Wales.

The “Don’t Get Bitten” launch aims to highlight the increasing problem and widen the discussion around solutions to both illegal and legal high interest moneylenders.

The Archbishop of Wales Barry Morgan, Assembly Minister for Communities and Tackling Poverty Jeff Cuthbert AM and Sian Williams of Toynbee Hall are supporting the launch which will be chaired by Victoria Winckler of the think-tank the Bevan Foundation.

Andrew Myatt, Director of Communities and Housing at Tai Calon Community Housing, Blaenau Gwent’s largest social landlord, was also at the launch.

Members of Tai Calon staff have been trained on spotting the warning signs that loan sharks are operating in a community and on how to support victims in seeking help from the Wales Illegal Moneylending Unit.

Andrew Myatt said “We are determined to do what we can to support the work of the Wales Illegal Moneylending Unit. We would appeal to anyone who owes money to a loan shark to seek help. At Tai Calon, we have staff that can give tenants advice and support with budgeting their money so that they do not need to turn to loan sharks.”

The event will showcase a television advert which will be aired on ITV Wales and S4C in February. CHC is also using the event to seek coalition support from politicians, the Church, trade unions and other stakeholders to tackle the growing problem of unethical and immoral borrowing otherwise known as usury.

WIMLU advises loan shark victims and investigates and prosecutes perpetrators of the crime. Since its creation in 2008, the unit has investigated a total of 187 alleged loan sharks, involving more than £2.5 million pound in loans. It has taken proceedings against 35 defendants with 11 receiving prison sentences.

WIMLU manager Stephen Grey said: “Many loan sharks have operated with impunity and used fear and intimidation to carry on their business. Our figures reveal that 75 per cent of people who use loan sharks are on benefits and 65 per cent of victims are women. We also find 40 per cent of victims have some form of mental or physical disability with a shocking 46 per cent considering the loan shark a friend!”

CHC’s Group Chief Executive Nick Bennett said: “We are delighted to join forces with the WIMLU to highlight the problem of loans sharks and unscrupulous lenders, with the ultimate aim to form a ‘coalition against usury’ with government, the Church, trade unions and other stakeholders.

Mr Bennett said the ‘Don’t get bitten’ campaign proposed a comprehensive and holistic approach to extending financial exclusion in Wales through a three pronged approach – awareness raising from the ‘Don’t Get Bitten’ campaign; advice - through the ‘Your Benefits Are Changing’ money advice project and access to affordable credit through organisations such as Moneyline Cymru and Credit Unions.

Mr Bennett added: “Wales is the poorest part of the UK with economic inactivity and benefit dependency higher here than anywhere else in the UK. Financial exclusion is a massive problem and while we are doing our bit to tackle usury we can’t do it alone. Loan sharks and high interest lenders prey on the deprived, the disabled and those on low incomes by saddling them with debts they simply cannot repay. Victims are left with the scars of spiralling debt, fear and worry.”

“Wonga didn’t exist six years ago – it’s now worth £600m and plans to treble its universe on the back of benefit reform and the introduction of Universal Credit. So access to alternative affordable and trustworthy credit is imperative if we are to tackle this growing scourge of society.”

CHC have also revealed that almost a quarter of those advised by the Your Benefits are Changing money advice team are in work – highlighting the growing problem of in-work poverty, with many turning to high interest lenders simply to make ends meet.

Communities & Tackling Poverty Minister Jeff Cuthbert said: “Many people are facing tough times, especially after Christmas and as the full impact of the changes to welfare kick-in. However, no matter how difficult things become, our message is that no one should even consider the temptation of using loan sharks.”

He added: “Turning to these people only leads to distress, worry and ultimately the loss of more money. There is legitimate, reliable advice and affordable loans available for those who find themselves with money problems. That is why the Welsh Government is providing financial support to credit unions and advice services to help our communities.”

Anyone concerned about loan sharks can contact the Wales Illegal Moneylending Unit by ringing the 24 hour Hotline- 0300 123 3311. Calls can be anonymous.

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