Investigation reveals loan sharks are causing widespread suffering across Scotland

Around 7% of people across the UK say they, or someone they live with, have interacted with a loan shark.

Victims are often threatened and intimidated into trying to pay back exorbitant sums of money.

Illegal money lenders, or loan sharks, are anyone who lends money to people without valid credit authorisation from the Financial Conduct Authority.

A loan shark can often be a friend or someone within the community that starts off friendly but they often prey on the most vulnerable.

“Linda” was the victim of an illegal loan shark after borrowing money from someone she thought was a friend.

Scotland

‘I thought she was my friend, then she was at my door demanding ten grand’

Scottish woman reveals she had a heart attack after suffering harassment at the hands of a loan shark.

They then demanded extortionate interest rates leading to a threatening campaign of harassment.

“I was absolutely horrendous, I was crying every night,” she said. “They were coming to the door, I was having to get the police and everything. I had to get the police about six times.”

A UK-wide survey conducted by Fair4All Finance found that 7% of people reported that they, or someone they live with, had interacted with an illegal money lender.

Fiona Richardson, chief officer at the Scottish Illegal Money Lending Unit (SIMLU), said that illegal money lenders can often be a friend or someone within your community you rely on.

SIMLU operates a 24/7 hotline which helps victims understand their rights and how to take back control.

The team tracks reports of where loan sharks are operating across the country and has identified illegal money lenders across Scotland in 30 out of 32 local authorities.

In some cases, a team of investigators can build cases against loan sharks that are reported to them and submit their evidence, however their priority is victim support.

Fiona said: “Whilst we would want to know who the illegal lender is so we can investigate them and stop them operating.

“Ultimately what we also want to do is help that individual so we can help refer them on to other agencies where they can get support.”

After the police were unable to help, Linda turned to Citizens Advice – who referred her to the Scottish Illegal Money Lending Unit.

Fiona explains: “If you’ve borrowed from an illegal lender, you haven’t done anything wrong – you haven’t broken the law.

“It’s (the loan shark) that has broken the law and they don’t have any right to enforce the debt and by doing so, they actually could actually be just making things worse for themselves, depending on how they do that.”

Niall Alexander, a financial expert for Fair4All Finance told STV News that many of them will be looking for small amounts of short-term credit – but can’t get it through regulated channels.

Mr Alexander said: “We think there’s about 20 million and more people in financially vulnerable circumstances who struggle to access credit.

“Typically people in the most vulnerable circumstances.

“They are people who rent their home, particularly social rent and people who are young, people with dependent children, often single parents with dependent children and people obviously on the lowest incomes and by the lowest incomes we are talking about people in the bottom four income deciles.

“I think there’s a danger that if we don’t get people access to fair and affordable credit in a regulated sense, then of course there’s a danger that people will seek money in an unregulated sense, or they will use friends or family who are sometimes not their friend.”

Fiona said: “Everybody has issues with money at times. It’s not something to be ashamed of.

“We don’t talk about money enough.

“One of the things that you know we would like to see is more concentration on financial education within schools.

“So that children grew up able to talk about money and able to accept when they maybe have an issue with budgeting and look at how they can deal with that rather than getting to a point of crisis.”

You can contact the Scottish Illegal Money Lending Unit helpline on 0800 074 0878 or visit stopillegallending.co.uk and fill out an online form.

You can also get advice at your local Citizens Advice Bureau here.

Watch the full report, Scotland Tonight: Dealing with Dangerous Debt, tonight at 8:30pm on STV and the STV Player.