One of Britain's most controversial legal loan sharks could be closed within weeks after it was caught pretending its staff worked for a firm of solicitors. Log Book Loans charges 478% annual interest to people with poor credit histories - as long as they own a motor. That's because it operates under an obscure Victorian law where the borrower signs away *ownership of their vehicle to Log Book Loans, usually in a branch of an agent like Cash Converters, but *sometimes in a car park or on the street.

They only get the car back, under the terms of a loan agreement, once the debt is paid off. That's no mean feat. A typical Log Book Loan of £1,500 repaid over 18 months ends up costing £3,317. Miss a repayment and the costs escalate. One borrower ended up owing £5,600 after initially taking out a £750 loan. Unlike a normal loan secured against an asset, where the lender needs to go to court to take possession, Log Book Loans already owns the vehicle taken as collateral. It's big business, based in London, turning over £20million a year and has 140 staff. A recent tribunal heard it is owed £59million in interest on £24million worth of loans and owns vehicles worth £82million.

But the Office of Fair Trading revoked Log Book Loan's consumer credit licence back in 2009, along with the licence of sister company Nine Regions, which acted as an "agent" but had the same directors and shareholders. Chief of these was Iain Shearer, a ex-footballer, who owns 75% of Log Book and 47% of Nine Regions and lives in a £2m mansion in the....Read more on this story---> Log Book Loans caught in "possibly criminal" sham - Investigations