Trading Standards Wales Week - Day 3 - Beware shark waters
Trading Standards Wales (TSW) and Stop Loan Sharks Wales are warning consumers to be vigilant on social media, as the team are receiving record reports of loan shark activity due to the cost-of-living crisis and increasing use of digital markets.
Intelligence collated by the team suggests that illegal money lenders are taking advantage of higher prices to profit from those who are struggling financially.
One recently convicted loan shark, whose legitimate income consisted solely of benefits, was found to have made over 600 cash deposits totalling £162,000 and enjoyed an extravagant lifestyle which included £32,000 being spent on luxury holidays, £48,000 on his and her 4x4 vehicles, and gambling losses of £29,000.
Research commissioned by Stop Loan Sharks Wales found that 50 % of those who borrowed money, did so to cover everyday living expenses and bills. More worryingly the research found that 44% of borrowers relied on informal lending in the form of friends, family, or co-workers.
Stop Loan Sharks Wales, Team Manager Sarah Smith explains her concerns:
“When investigating cases of illegal money lending, victims consistently report that they did not see the lender as a loan shark. They describe long term arrangements and relationships going back many years, with the lender being a relative, friend or someone they work or used to work with.”
Stop Loan Sharks Wales are particularly concerned about younger borrowers, as research has found that those aged 18-24 are more likely to have used an illegal lender but they are less likely to know this type of lending is illegal.
Smith explains “Loan sharks are increasingly using social media platforms, such as Facebook, Instagram and Snapchat, to advertise their illegal loans and target potential victims. They also use community groups and local selling pages. We know younger people who need access to money quickly, are susceptible to loan sharks operating online”
Familiarising yourself with the following common traits of an illegal money lender, or loan shark, could prevent you from becoming a victim:
• May appear friendly and helpful at first.
• Repayments are unclear and very high, with additional “penalties” added to loan for missed payment.
• Rarely provides paperwork.
• Uses harassment and threats to ensure payment.
• Takes possessions such as bank cards or passport for security.
• Vulnerable victims are subjected to grooming behaviour.
Stop Loan Sharks Wales protects and supports victims of illegal money lending and related crimes, as well as investigating and prosecuting loan sharks in Wales. If you're worried about your own situation, or somebody you know, please contact Stop Loan Sharks Wales for safe, confidential advice and support. Call 0300 123 3311 or visit stoploansharkswales.co.uk.
The team are currently undertaking further research to understand lending habits amongst younger people, to provide targeted support and advice.
If anyone has experience of lending from informal sources such as family or friends, or people they were referred to, we would like to hear about it to. Any information can be provided in confidence and you can get in touch with the team via the website Tell us about it - Stop Loan Sharks Wales : Stop Loan Sharks Wales or social media
For further information, please go to our website and our YouTube channel
The podcast for Day 3 can be heard here.
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