Britain is in the midst of a loan shark epidemic. The latest data suggests that more than a million people a year are being robbed.to They turn to illegal lenders in case of desperation.
In many cases, people do not sign the documents and then end up paying the price, with interest that can triple.
Next, Susan* tells her story and how she now lives in fear of the person she borrowed money from.
Overwhelming: Susan will have paid back almost three times what she borrowed by the time she finishes paying (file image)
“I think as long as he gets his money he’ll be fine,” Susan tells This is Money.
‘But if we don’t pay, they told us that they would beat us up, both me and my partner.
“I don’t want that to happen in front of my son.”
Last October, Susan borrowed £3,000 from a “friend of a friend”. At the time, she didn’t realise that she would have to pay back much more than she had borrowed.
Despite having started paying off the loan in October, Susan will not have finished paying it off until December of this year.
In total, he expects to pay £8,400 to the lender, and if he defaults, he has been told it “won’t be pretty”.
“We have to meet our payments,” he said. “There is no other way to do it.”
Susan pays £600 a month, £200 for each loan she has taken out. She initially borrowed the money to buy essential items for the flat she was moving into and to pay council tax on a house she shared with her ex-partner but has not lived in since 2018.
She no longer speaks to her ex and says the entire debt falls on her.
“I met my fiancé three years ago and he was in a shelter where he could only stay for six months. So we had to take out a loan to buy a fridge, freezer and beds.”
She said: ‘We were hoping to pay back what we had borrowed, which was £1,000 per loan. Then we found out that because he is a loan shark, we would have to pay back £2,800 per loan.
“If we had known at the time, we would not have applied for the loan.”
Susan does not have any documents stating the terms of her loan.
This also means that she has little evidence to illustrate her situation if she were to report the illegal lender.
Rebecca Lamb, external relations manager at Money Wellness, said: “We actively ensure our counsellors respond to suspected and reported illegal money lending, either by directing victims to relevant services or providing direct support.”
‘By flagging Stop Loan Sharks, we help customers report unlicensed lenders targeting vulnerable people.
‘They will then be investigated by teams comprising specialist investigators and victim support officers, which may include the police, business authorities and debt counsellors.’
‘As in this case, illegal money lending is not enforceable in court because the debts cannot be proven.
‘We would not normally consider these debts as qualifying debts and because these are unlicensed or illegal lenders, loan repayments are usually not affordable or are not an allowable expense in some recommended solutions.’
Even if Susan reported the loan shark, his identity remained hidden from her all the time.
“I don’t know who that person is, he’s not a registered lender, he’s a person my friend knows, a kind of friend of a friend,” he said.
At the time, Susan needed the money and an acquaintance told her: “This person can help you.” Since her partner was in a halfway house, it seemed like an easy way to borrow money without having to resort to traditional forms of credit.
But he had not considered the problems this loan could bring and did not realize that he would be paying almost three times what he borrowed.
Although she hopes to be able to make the payments, Susan says the experience has been difficult and she wants to warn others about the dangers.
Shortly after applying for the loan, Susan was diagnosed with cancer and, unsurprisingly, her thoughts about the loan took a backseat.
When he was diagnosed, he said the loan was the least of his worries.
“I thought, ‘Oh my God, I’m going to die.’ You know, cancer is a big word,” she said.
‘The doctor put me on antidepressants because of that. It’s been hard for me, it’s been hard for my partner, we didn’t realise how much we were going to have to pay back.
“It’s been a very tough time,” she said. “I don’t even know if the treatment will work and I think about it all the time. I don’t want to be saddled with the loan.”
Anyone who believes they may have been a victim of a loan shark can contact the Stop Loan Sharks 24-hour confidential helpline on 0300 555 2222, email reportaloanshark@stoploansharks.gov.uk or complete an online reporting form at www.stoploansharks.co.ukLive chat is available on the website from 9am to 5pm, Monday to Friday.
*Name changed
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