Birmingham Nets First Shark
3rd November 2004

Birmingham City Council today became the first local authority to start court action against an unlicensed money lender and has up to 20 more investigations under way. The actions follow the establishment of two loan shark investigation teams earlier this year by the DTI, in Birmingham and Glasgow.

Birmingham City Council's Trading Standards Team, are today seeking an injunction to prevent a suspected loan shark from visiting his 'customers' and have stated that they are considering further prosecution under the Consumer Credit Act and for criminal offences of intimidation and theft. The moneylender concerned is believed to have charged 100% interest and to have been involved in physical beatings to recover outstanding debts. Insiders have also reported that family and friends of people owing money have also been threatened.

Damon Gibbons, Co-Chair of Debt on our Doorstep, welcomed the actions, which involved a police raid in the early hours of the morning:

'Debt on our Doorstep has called for greater steps to be taken against illegal lenders since 1999, and we are pleased that the early results from the DTI pilot schemes are positive. However, we badly need a national scheme that will tackle both legal and illegal lenders and deliver real savings to low income borrowers. Such a scheme must enable regulators to reduce the cost of credit where this is out of proportion to the actual risks that lenders face, as well as deal with unfair practices. Where markets are failing consumers then the Government should intervene at that level, not simply address individual cases of bad practice and illegality.'