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Sixty victims of loan sharks are in witness protection, according to the country's leading official tasked with breaking the cycle of fear, intimidation and violence trapping families who have borrowed money from illegal lenders.
Tony Quigley, head of the Illegal Money Lending Team (IMLT) in England, revealed that, across Britain, borrowers were paying at least £700m a year to predatory extortionists. The figure is equivalent to a third of the legal short-term payday loan market, which the Office of Fair Trading last year estimated to be worth £2.2bn.
Quigley, whose national enforcement team has powers of arrest and prosecution, said there was an increasing awareness of the help now available to bullied and traumatised victims. He said the true scale of the misery exerted by criminals who might have otherwise gone undetected for years was emerging now that more victims were coming forward.
Quigley said currently 60 cases had been given witness protection. Only the most extreme cases are considered for this protection.
The £700m figure was a conservative estimate for the illegal loans market, he added. "It really is hideous what some of the loan sharks do to a community. It is just exploitation and profiteering of the worst kind. We believe we have stopped 25 suicides, from what victims have told us."
Quigley admitted the scale of lending and payment were difficult to quantify. "It is criminality. We know it is constant, "We know the impact it has, not just on those [borrowing], but it is all on the ghost economy, when no tax and no insurance are paid and it's all cash."
In many cases, there is no record of the transaction between a loan shark and a debtor. Lenders often punish borrowers, especially those who miss payments, with arbitrary increases on the amount owed.
Loan sharks often appear warm and friendly until repayments stop, and they are often heard about through friends, said Quigley. Some take passports, driving licences, even bank cards with a PIN to draw directly from borrowers' accounts.
While there was no "specific DNA" to the criminals, they all lent money at extortionate rates.
Quigley said that while it was difficult to tell whether the illegal lending market was growing because of austerity, the readiness of victims to come forward, combined with better co-operation between authorities, were paying dividends.
He based his £700m figure on research from 2010 by the consultancy Policis for the Department for Business, Innovation and Skills. It estimated there were 310,000 borrowers of illegal loans in the UK. An average of £350 a time was borrowed, and £700 paid back over 14 weeks at what lenders call "double bubble", Quigley said. Most people borrowed a number of times.
"We are not only taking out small-time lenders who have a bad effect, but Mr Bigs as well. Once you remove a loan shark, the debt everyone owes is wiped out. That in itself boosts the local economy," he said.
Those borrowing from loan sharks generally pay the lender first because they are frightened. "That has an impact on everything else. You see rent arrears increasing, properties becoming empty, people doing moonlight flits, petty crime going up.
"If you are handing over all the money to the loan shark and he is only giving you a little bit of money to live on and you have children to feed and the bills to pay, how do you make ends meet?"
In some cases, sharks "rented out" money, leaving their victims perpetually in debt and never paying off the capital sum. Quigley said that since debts were unenforceable in law, the only way lenders could ensure they were paid was through "fear, intimidation and acts of violence".
Threats to borrowers' partners and children often proved the tipping point for people calling the authorities, Quigley said. In one case, a man who had taken out a loan for £250 paid back £90,000 over 17 years before contacting Quigley's team. The lender was jailed for eight months at Ipswich crown court.
The IMLTs in England, Scotland and Wales have brought more than 300 prosecutions since pilot schemes began in Birmingham and Glasgow in 2004 following decades of poor enforcement. Their work has helped about 23,000 victims of loan sharks and led to more than £42m worth of illegal debts being written off.
Last year, there were 100 arrests and 50 prosecutions, with the accused sometimes also facing charges such as benefit fraud, money-laundering, wounding, assault, blackmail and kidnapping.
Investigations are not confined to cities. They have included predominantly rural counties such as Cumbria, Devon and Cornwall.
In England, nearly all local authorities have now delegated their powers in this area to Birmingham city council, which hosts Quigley's team.
A 60-strong staff include investigators, lawyers and victim support officers, who are funded through the National Trading Standards Board. All the teams run anonymous phonelines to encourage borrowers to report their persecutors. Quigley's gets 50-60 a month.
Half the assets seized go to the Treasury and a third of the rest is used to cover court costs. But much of the remainder helps fund local community projects advertising the Stop Loan Sharks campaign and financial incentives for people to save and borrow from legal sources. Taxi and hire-car drivers are among those who have proved vulnerable to illegal lenders because of the costs of starting up.
"We are trying to change the next generation. I am not naive, but if we can stop one person using a loan shark, it will have been worth it because of the misery it brings with it," said Quigley.
Sometimes the team cannot find sufficient evidence to prosecute; at other times it is not in the public interest, he said. "We may decide not to take a case because we would leave potential witnesses open to retribution, because only one person came forward. It is safety in numbers. We have to consider a whole host of risks and precautions."
It is sometimes enough just to disrupt an illegal operation, he said. "We have had cases without victims where the evidence is so significant that we felt we could prove beyond all reasonable doubt what [illegal lenders] were doing."
'Don't feed your kids – pay me'
Joseph Kiely made £3.6m from illegal loans to about 1,200 people in east Manchester. He was jailed for a total of five years in 2009 after being given concurrent and consecutive sentences – 21 months for blackmail, two years for acquiring criminal property, 15 months for converting criminal property, 12 months for illegal moneylending and three months for failing to provide information to the Office of Fair Trading.
Between May 2003 and December 2007, his illegal moneylending business had a turnover of almost £3m. He charged interest rates that would amount to between 433% and 2,437% APR. A hearing in 2010 confiscated assets amounting to £1.2m.
Paul Nicholson swindled millions of pounds from people in Cheshire and in 2009 was convicted of a number of charges including rape, blackmail, illegal moneylending and laundering. He was given at least six and a half years in prison. He made an estimated £2.7m in ill-gotten gains and in late 2010 he was ordered to surrender almost £1m of assets including capital from a sprawling mansion in Delamere, Cheshire, and his luxury villa in Spain, as well as £26,000 of cash found in his house, his Porsche, his horses, quad bikes and jewellery.
One victim killed himself after a loan of £300 soared to £3,000 in 12 weeks. Nicholson made one woman perform oral sex on him, threatened to petrol-bomb another's house and told one distraught debtor: "Your priority is to pay me, not feed your kids."
John Radford, once a licensed moneylender, was convicted and sentenced to 30 months in prison by Chester crown court for illegally lending last November last year. Two associates were jailed for 10 months.
Police found weapons including machetes, knuckledusters, and pepper spray when they searched Radford's home in March 2012. More than £17,000 was found in safes. When they were arrested, the trio were due a return put at more than £420,000. Loan records suggested that in one six-week period they had about 130 customers owing them almost £100,000.
One victim paid back £60 a year for a week, meaning they had to pay back three times the initial loan. They then took out more loans to repay the first, eventually owing more than £13,000. Radford had 17 other properties, nine vehicles and more than £775,000 across five in bank accounts, despite declaring less than £250,000 as income through employment and renting properties since 2003.
http://www.theguardian.com/uk-news/2...l-moneylending
Tony Quigley, head of the Illegal Money Lending Team (IMLT) in England, revealed that, across Britain, borrowers were paying at least £700m a year to predatory extortionists. The figure is equivalent to a third of the legal short-term payday loan market, which the Office of Fair Trading last year estimated to be worth £2.2bn.
Quigley, whose national enforcement team has powers of arrest and prosecution, said there was an increasing awareness of the help now available to bullied and traumatised victims. He said the true scale of the misery exerted by criminals who might have otherwise gone undetected for years was emerging now that more victims were coming forward.
Quigley said currently 60 cases had been given witness protection. Only the most extreme cases are considered for this protection.
The £700m figure was a conservative estimate for the illegal loans market, he added. "It really is hideous what some of the loan sharks do to a community. It is just exploitation and profiteering of the worst kind. We believe we have stopped 25 suicides, from what victims have told us."
Quigley admitted the scale of lending and payment were difficult to quantify. "It is criminality. We know it is constant, "We know the impact it has, not just on those [borrowing], but it is all on the ghost economy, when no tax and no insurance are paid and it's all cash."
In many cases, there is no record of the transaction between a loan shark and a debtor. Lenders often punish borrowers, especially those who miss payments, with arbitrary increases on the amount owed.
Loan sharks often appear warm and friendly until repayments stop, and they are often heard about through friends, said Quigley. Some take passports, driving licences, even bank cards with a PIN to draw directly from borrowers' accounts.
While there was no "specific DNA" to the criminals, they all lent money at extortionate rates.
Quigley said that while it was difficult to tell whether the illegal lending market was growing because of austerity, the readiness of victims to come forward, combined with better co-operation between authorities, were paying dividends.
He based his £700m figure on research from 2010 by the consultancy Policis for the Department for Business, Innovation and Skills. It estimated there were 310,000 borrowers of illegal loans in the UK. An average of £350 a time was borrowed, and £700 paid back over 14 weeks at what lenders call "double bubble", Quigley said. Most people borrowed a number of times.
"We are not only taking out small-time lenders who have a bad effect, but Mr Bigs as well. Once you remove a loan shark, the debt everyone owes is wiped out. That in itself boosts the local economy," he said.
Those borrowing from loan sharks generally pay the lender first because they are frightened. "That has an impact on everything else. You see rent arrears increasing, properties becoming empty, people doing moonlight flits, petty crime going up.
"If you are handing over all the money to the loan shark and he is only giving you a little bit of money to live on and you have children to feed and the bills to pay, how do you make ends meet?"
In some cases, sharks "rented out" money, leaving their victims perpetually in debt and never paying off the capital sum. Quigley said that since debts were unenforceable in law, the only way lenders could ensure they were paid was through "fear, intimidation and acts of violence".
Threats to borrowers' partners and children often proved the tipping point for people calling the authorities, Quigley said. In one case, a man who had taken out a loan for £250 paid back £90,000 over 17 years before contacting Quigley's team. The lender was jailed for eight months at Ipswich crown court.
The IMLTs in England, Scotland and Wales have brought more than 300 prosecutions since pilot schemes began in Birmingham and Glasgow in 2004 following decades of poor enforcement. Their work has helped about 23,000 victims of loan sharks and led to more than £42m worth of illegal debts being written off.
Last year, there were 100 arrests and 50 prosecutions, with the accused sometimes also facing charges such as benefit fraud, money-laundering, wounding, assault, blackmail and kidnapping.
Investigations are not confined to cities. They have included predominantly rural counties such as Cumbria, Devon and Cornwall.
In England, nearly all local authorities have now delegated their powers in this area to Birmingham city council, which hosts Quigley's team.
A 60-strong staff include investigators, lawyers and victim support officers, who are funded through the National Trading Standards Board. All the teams run anonymous phonelines to encourage borrowers to report their persecutors. Quigley's gets 50-60 a month.
Half the assets seized go to the Treasury and a third of the rest is used to cover court costs. But much of the remainder helps fund local community projects advertising the Stop Loan Sharks campaign and financial incentives for people to save and borrow from legal sources. Taxi and hire-car drivers are among those who have proved vulnerable to illegal lenders because of the costs of starting up.
"We are trying to change the next generation. I am not naive, but if we can stop one person using a loan shark, it will have been worth it because of the misery it brings with it," said Quigley.
Sometimes the team cannot find sufficient evidence to prosecute; at other times it is not in the public interest, he said. "We may decide not to take a case because we would leave potential witnesses open to retribution, because only one person came forward. It is safety in numbers. We have to consider a whole host of risks and precautions."
It is sometimes enough just to disrupt an illegal operation, he said. "We have had cases without victims where the evidence is so significant that we felt we could prove beyond all reasonable doubt what [illegal lenders] were doing."
'Don't feed your kids – pay me'
Joseph Kiely made £3.6m from illegal loans to about 1,200 people in east Manchester. He was jailed for a total of five years in 2009 after being given concurrent and consecutive sentences – 21 months for blackmail, two years for acquiring criminal property, 15 months for converting criminal property, 12 months for illegal moneylending and three months for failing to provide information to the Office of Fair Trading.
Between May 2003 and December 2007, his illegal moneylending business had a turnover of almost £3m. He charged interest rates that would amount to between 433% and 2,437% APR. A hearing in 2010 confiscated assets amounting to £1.2m.
Paul Nicholson swindled millions of pounds from people in Cheshire and in 2009 was convicted of a number of charges including rape, blackmail, illegal moneylending and laundering. He was given at least six and a half years in prison. He made an estimated £2.7m in ill-gotten gains and in late 2010 he was ordered to surrender almost £1m of assets including capital from a sprawling mansion in Delamere, Cheshire, and his luxury villa in Spain, as well as £26,000 of cash found in his house, his Porsche, his horses, quad bikes and jewellery.
One victim killed himself after a loan of £300 soared to £3,000 in 12 weeks. Nicholson made one woman perform oral sex on him, threatened to petrol-bomb another's house and told one distraught debtor: "Your priority is to pay me, not feed your kids."
John Radford, once a licensed moneylender, was convicted and sentenced to 30 months in prison by Chester crown court for illegally lending last November last year. Two associates were jailed for 10 months.
Police found weapons including machetes, knuckledusters, and pepper spray when they searched Radford's home in March 2012. More than £17,000 was found in safes. When they were arrested, the trio were due a return put at more than £420,000. Loan records suggested that in one six-week period they had about 130 customers owing them almost £100,000.
One victim paid back £60 a year for a week, meaning they had to pay back three times the initial loan. They then took out more loans to repay the first, eventually owing more than £13,000. Radford had 17 other properties, nine vehicles and more than £775,000 across five in bank accounts, despite declaring less than £250,000 as income through employment and renting properties since 2003.
http://www.theguardian.com/uk-news/2...l-moneylending
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