The Scottish Illegal Money Lending Unit has warned that as more people find themselves in financial difficulties because of Covid-19, illegal lenders may look to take advantage

Campaign to target online loan sharks

New charter scheme aims to protect vulnerable borrowers


A new campaign against loan sharks has been launched to crack down on lenders who are moving online to prey on people in Scotland. Te Scottish Illegal Money

Lending Unit (SIMLU) has unveiled a charter mark as part of the campaign for organisa- tions which take a zero-tolerance approach to loan sharks operat- ing within their communities. Te first recipients of the award are housing, care and property management company Wheat-

ley Group and StepChange debt charity. Illegal moneylenders are

increasingly moving online and using social media platforms such as Facebook, Instagram and Snap- chat to advertise their illegal loans and target potential victims. Te England Illegal Money Lend-

ing Team has reported that one in five users of loan sharks discovered them on social media in the first half of the year, with similar tactics being used in Scotland. Te SIMLU has warned that as

more people find themselves in fi- nancial difficulties because of the Covid-19 pandemic, illegal lenders may look to take advantage of those who are most vulnerable. On average, loans from illegal

lenders end up costing three times as much as a legal loan. Although loans from community- based lenders may be seen as pro-

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viding a quick solution for those in crisis situations, the lenders may not be authorised by the Financial Conduct Authority and could charge huge interest rates. Organisations that receive the

Loan Shark Charter Mark pledge to work in partnership with the SIMLU to increase their reach within communities and to in- crease the confidence of residents to enable them to report illegal loan shark activity safely. Te SIMLU is part of Trading

Standards Scotland and is funded by HM Treasury through the levy placed on authorised credit busi- nesses by the UK Government. Fiona Richardson, chief officer

of Trading Standards Scotland, said: “Many people may find that they have less money than usual due to the impact of the Covid-19 pandemic. People may also find it more difficult to borrow money, either because their work situa- tion has changed or because lend- ers are simply lending less. “We want to stress the dangers

of borrowing from unauthorised or informal lenders. It may seem like a quick and easy way to get some money and borrowers may intend to repay the money quickly. However, people can find themselves trapped in a cycle of mounting debt, often with the lender intimidating, harassing and threatening them.

“Our advice is to never borrow

from a loan shark, but if you have done or even if you are think- ing about doing so, please come to us. We investigate people that lend in this way because they are breaking the law, but those who borrow from loan sharks have done nothing wrong. We can put you in touch with agencies who will be able to support you.” John Pollock, partnership and

support officer with the Scot- tish Illegal Money Lending Unit, said: “We are launching the Loan Shark Charter Mark to strengthen our partnerships with other or- ganisations that we know are key to tackling illegal money lending. “We need to make sure that

there is a zero-tolerance approach to this type of lending and we can only do that by working closely with agencies that provide advice and support on a daily basis. “By establishing the Charter

Mark we aim to create a network of organisations actively seeking to uncover and tackle illegal lending, but most importantly, that network will help to stop people from ever using loan sharks in the first place. “It is vitally important to our

work to create an environment where people feel that they can report illegal lenders without any personal risk to themselves. We need close relationships with front- line agencies in order to do this.” l

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