The OFT is taking part in a campaign to warn people of the dangers of loan sharks that charge exorbitant interest and use violence and threats to enforce debts.
As part of the 'Stop Loan Sharks' campaign, the OFT and the Trading Standards Illegal Money Lending Teams have released a new video urging people to report loan sharks, and will be distributing around 200,000 leaflets and posters throughout England, Scotland and Wales.
There are an estimated 165,000 households in the UK using illegal money lenders, with half of these in the most deprived areas of the country . Particular loan shark hotspots include Scotland, the North of England and the West Midlands.
Anyone lending money should have a consumer credit licence from the OFT. Licensed lenders have to comply with legal obligations in dealing with customers, including the use of proper paperwork and fair collection methods. Unlicensed loan sharks will often offer cash loans without paperwork, they may take benefit or bank cards as security, and threaten or use violence to get money.
Ray Watson, Director of the OFT's Consumer Credit Group said:
'If you've borrowed money from a loan shark you haven't broken the law, they have. Loan sharks cause misery to thousands of families and should be stopped. If you have information about loan sharks, report it to the Illegal Money Lending hotline.'
Jacqui Kennedy, Director of Regulatory Services at Birmingham City Council said:
'It's great to have the support of this campaign in our continued fight against loan sharks. It's vital that we get our message out to vulnerable people that loan sharks are never a good option. It may seem like easy cash at first but very quickly people can become trapped in a spiral of debt, with entire communities having their lives controlled by loan sharks and living in fear and despair. I'm sure this campaign will help people understand just how dangerous loan sharks are and that there is help available.'
Nationally, the Stop Loan Sharks project has so far helped more than 11,500 people, written off more than £31 million of illegal debt, secured more than 60 years in prison sentences including an indefinite sentence for public protection, and seized £1million in cash.
Loan sharks can be reported to the Trading Standards Illegal Money Lending Team by calling 0300 555 2222, texting 'loan shark' and the details to 60003 or sending an email to reportaloanshark@stoploansharks.gov.uk.
NOTES
The 'Stop Loan Sharks' project was set up by the then Department of Trade and Industry in 2004, and is now overseen by the Department for Business, Innovation and Skills (BIS). There are now seven dedicated illegal money lending teams covering England, Scotland and Wales.
Watch the 'Stop Loan Sharks' campaign film on Youtube. The film will be distributed to broadcasters for use during space in ad breaks.
SOURCE: OFT Press Release