Every year, debts of roughly £88 million are run-up through illegal money lenders.[1] The number of Londoners in debt to loan sharks is difficult to estimate but the London Assembly heard today that an estimated 40,000 households in London use them each year. However the true scale of illegal money lending in London could far exceed the estimated figures, as this behaviour is under-reported. The London Assembly Economy Committee today heard the top reasons why people turn to this kind of money lending:
They believe they can’t access other forms of credit and this includes a number of vulnerable, hard-to-reach groups, like disabled people
An emergency takes place, which they have to deal with quickly
They are put off by filling in forms
Illegal money lenders can appear trustworthy at first
Jenny Jones AM, Chair of the Economy Committee, said: “Clearly, we have to tackle loan sharking and this form of criminality, which can also be linked to organised crime. Loan sharks take advantage of vulnerable communities, usually through the guise of friendship. We heard today that illegal money lending takes place across London and is often not reported due to the powerful position of the lenders within that community. More needs to be done to point out that this practice is illegal and it needs to stamped-out. We hope more victims contact the illegal money lending helpline with information about these practices. The Economy Committee will now consider how the Mayor can play his part by raising awareness of the issue.” Notes for editors:
Tony Quigley, Head of the England Illegal Money Lending Team, Economy Committee, 9 December 2014 references Interim Evaluation of the National Illegal Money Lending Projects, BIS, October 2010.
Illegal Money Lending Team contact details.
Jenny Jones AM, Chair of the Economy Committee is available for interview – see contact details below.
As well as investigating issues that matter to Londoners, the London Assembly acts as a check and balance on the Mayor.
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