AFFLUENT families are increasingly turning to illegal money lenders as their debts spiral out of control, experts have warned.
Investigators have identified a shift in the profile of victims turning to loan sharks and said more homeowners and self-employed workers are resorting to back-street lenders than ever before.
Illegal lenders are known to prey on unemployed victims living in social housing. But now officers claim debt-ridden homeowners from more affluent areas are using illegal money lending rackets.
Investigators from the Illegal Money Lending Team (IMLT) said households would now be feeling the pinch as they are forced to pay back extortionate rates on loans taken out to fund Christmas.
Cath Wohlers, an officer from the IMLT, said: “Last year we believe there were 310,000 households across the country who had been forced to use illegal lenders. But this is a hidden crime.
“What we have seen is a change in the profile of the victim. Four years ago, when I first started, people were in social housing and unemployed.
“Now one quarter of all victims are self-employed. There’s been an increase in the number of homeowners. There’s an increase in more affluent people using loan sharks.
“One of the reasons is because quite often loan sharks are your best friend and they offer cash when times are difficult like at Christmas or when you have to carry out repairs on your car. People are not actively seeking loan sharks, the loan shark is targeting them.
“But when you can’t pay back they turn nasty. There are psychological consequences where they threaten people’s children, or husband. But then there’s the other extreme, cases of kidnap, rape or assault. These are the physical consequences.”
Last year it emerged that businesses and self-employed people in the North East were increasingly turning to illegal money lenders as they found it harder to borrow money in the recession.
Nationally there are an estimated 310,000 households borrowing from illegal money lenders, with specialists claiming that the highest interest rate charged was 131,000% APR.
The Illegal Money Lending Team has secured more than 220 prosecutions leading to custodial sentences in excess of 134 years and written off almost £4m worth of illegal debt by helping more than 18,000 victims.
Last night a mother told how a North East loan shark had preyed on her disabled son to extort thousands of pounds from him over a nine-month period.
The 42-year-old, who suffers from multiple sclerosis and a psychological disorder, was coaxed into taking out a loan worth around £500 – but ended up paying back more than £5,000.
His 59-year-old mother, who The Journal has agreed not to name, said: “My son is a vulnerable man. He was spending time at a young couple’s home but he borrowed money and he couldn’t pay it off.
“They put a note through his door saying they wanted money. I went round to the house and there was no gas, no food. He had nothing.
“I was there when the loan shark came round. He was 6ft 2ins and I’m 4ft 10ins. He said he wanted his money.
“I put my hand on my son’s knee and said, ‘Do you owe any money?’ He said no, so I told the loan shark to leave. He was screaming and swearing. The following Saturday I called the IMLT and he was arrested and cautioned.”
