INSIGHTS ¦ Illegal Money Lending team update


The Illegal Money Lending Team (IMLT) in England update provided an extensive overview of the pernicious effects of loan sharks on borrowers. It highlighted the significant emotional, physical, and financial distress caused by illegal lenders, alongside statistical insights into the demographics of those affected, their reasons for borrowing, and the outcomes of such engagements.

Key Points

  • The IMLT focuses on investigating and prosecuting illegal lenders while offering support to borrowers.
  • A significant majority of borrowers (81%) experienced extreme stress, worry, or depression due to their involvement with loan sharks.
  • Physical harm or threats thereof, including forced sexual services, were reported by 31% of borrowers.
  • Suicidal thoughts or attempts were experienced by 31% of borrowers as a result of their dealings with loan sharks.
  • The youngest and oldest borrowers were 19 and 91 years old, respectively, showing the wide age range of individuals targeted by loan sharks.
  • 60% of borrowers were female, indicating a gender disparity in the victims of illegal lending.
  • The prevalence of online interactions with loan sharks increased in 2023, reflecting a shift in how lenders operate.
  • A significant portion of borrowers (64%) reported long-term health conditions, underscoring the vulnerability of those targeted by loan sharks.
  • The primary reason for borrowing from loan sharks was to cover everyday household bills (33%), followed by food, fuel, and essential items for children (24%).
  • The majority of borrowers (65%) had household incomes below £20,000, highlighting the economic vulnerabilities leading to borrowing from loan sharks.
  • Repayment methods varied, with 62% making payments via bank transfers to the lender’s account, though many still repaid in person or at their workplace.
  • A notable 43% of borrowers initially believed the loan shark was their friend, illustrating the manipulative tactics used by illegal lenders.
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Key Statistics

  • 81% of borrowers experienced extreme stress, worry, or depression.
  • 31% faced threats of physical harm or actual assault.
  • 31% had considered or attempted suicide due to their debt.
  • The borrower demographics were 60% female and 40% male.
  • 64% of clients reported having a long-term health condition.
  • 33% borrowed for everyday household bills, with 24% specifying food, fuel, or essential child needs.
  • 65% of borrowers had household incomes of less than £20,000.
  • The highest amount repaid to a loan shark was £450,000 on a £99,000 gambling debt.
  • 71% of supported individuals owed money to other organisations as well.
  • 43% sought debt advice, with a significant improvement in the awareness of loan shark debts among advice organisations.
  • 46% of borrowers had never heard of credit unions.

Key Takeaways

  • The emotional and physical toll of borrowing from loan sharks is profound, with a vast majority of borrowers suffering from extreme stress or depression.
  • The threat and occurrence of physical violence, including sexual assault, are stark realities for those involved with illegal lenders.
  • Suicidal ideation is alarmingly common among borrowers, highlighting the desperate situations they find themselves in.
  • There is a broad age range of victims, emphasising that loan sharks target individuals of all ages.
  • Female borrowers constitute a majority, indicating potential targeting or greater vulnerability among women.
  • The shift towards online platforms for loan shark operations reflects changing tactics in the digital age.
  • Long-term health conditions are prevalent among borrowers, pointing to the exploitation of vulnerable individuals.
  • The primary reasons for borrowing include essential living expenses, with a significant focus on household bills and basic needs.
  • Low household income is a common characteristic among those who turn to loan sharks, underlining financial desperation as a key driver.
  • The methods of repayment and interaction with loan sharks are diversifying, with digital transactions becoming more common.
  • The perception of loan sharks as friends initially by a significant minority of borrowers reveals the deceitful nature of these lenders.
  • The lack of awareness about credit unions among borrowers suggests a need for greater financial education and support.
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