Summary
This report, prepared by the England Illegal Money Lending Team (IMLT), provides insights into the experiences and support needs of borrowers impacted by illegal money lenders (“loan sharks”). It examines borrower demographics, the impact on mental health and financial well-being, and outlines strategies to support victims, including engagement with community partners and debt advisory services.
Key Take Aways
- Borrower Demographics: 59% female borrowers; 67% of households earn under £20,000 annually.
- Housing: 49% live in social housing, while 13% own homes.
- Mental Health Impact: 93% of borrowers report severe anxiety, depression, or stress due to loan shark debt.
- Vulnerability: 40% of borrowers considered or attempted suicide while dealing with illegal debt.
- Common Borrowing Reasons: Household bills, food, and fuel are primary drivers of borrowing, with 20% specifically borrowing for utilities.
- Debt Scale: Median loan shark debt is £6,100, with repayments often exceeding double the original amount.
- Community Ties: Most borrowers meet loan sharks through personal networks (57% via friends or family).
- Financial Advice: 38% sought debt advice, though many were initially hesitant to disclose illegal debt due to fear or shame.
- Partner Agencies: Engagement with local authorities, Citizens Advice, and credit unions helps borrowers access support services.
- Long-term Support: It often takes borrowers years to recognize themselves as victims of crime and seek assistance.
Innovation
- Integrated Support: IMLT enhances collaboration with debt advisory and community services to improve borrower outreach and engagement.
- Training Initiatives: Bespoke training for professionals to identify and support borrowers affected by illegal money lending.
Key Statistics
- 76% of clients borrowed multiple times from loan sharks.
- 57% initially perceived their lender as a friend.
- 91% of borrowers had no savings.
- 69% reported a long-term health condition.
- Loan repayments typically occur via bank transfers (51%).
Original: LINK
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