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The OFT is taking part in a campaign to warn consumers of the dangers of loan
sharks that charge exorbitant interest and use violence and threats to enforce
debts.
As part of the "Stop Loan Sharks" campaign, the OFT and the Trading Standards
Illegal Money Lending Teams have released a new video urging people to report
loan sharks, and will be distributing around 200,000 leaflets and posters
throughout the country.
There are an estimated 165,000 households in the UK using illegal money lenders,
with half of these in the most deprived areas, such as Scotland, the North of
England and the West Midlands.
Anyone lending money should have a consumer credit licence from the OFT.
Licensed lenders have to comply with legal obligations in dealing with
customers, including the use of proper paperwork and fair collection methods.
Unlicensed loan sharks will often offer cash loans without paperwork, they may
take benefit or bank cards as security, and threaten or use violence to get
money.
Ray Watson, Director of the OFT's Consumer Credit Group commented: "If you've
borrowed money from a loan shark you haven't broken the law, they have.
"Loan sharks cause misery to thousands of families and should be stopped.
"If you have information about loan sharks, report it to the Illegal Money
Lending hotline.''
Jacqui Kennedy, Director of Regulatory Services at Birmingham City Council
added: "It's great to have the support of this campaign in our continued fight
against loan sharks.
"It's vital that we get our message out to vulnerable people that loan sharks
are never a good option.
"It may seem like easy cash at first but very quickly people can become trapped
in a spiral of debt, with entire communities having their lives controlled by
loan sharks and living in fear and despair.
"I'm sure this campaign will help people understand just how dangerous loan
sharks are and that there is help available."
The Stop Loan Sharks project has so far helped more than 11,500 people, written
off more than £31 million of illegal debt, secured more than 60 years in prison
sentences including an indefinite sentence for public protection, and seized
£1million in cash.
Source:
Getting Paid
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