Zync Digital is a huge advocate and supporter of credit unions, which help individuals local to their business save and borrow money in a way that’s safe and customised for every individual customer. The England Illegal Money Lending Team works hand in hand with these organisations with the objective of spreading awareness about loan sharks, the prosecution of illegal money lenders, and ensuring that people across the nation have access to safe and certified loans.
Another big part of the IMLT is to offer support, advice, and any other type of assistance necessary to those who have fallen victim to loan sharks. We spoke to Cath Wohlers, LIAISE Manager at the Illegal Money Lending Team/Stop Loan Sharks England, about her role in the organisation and more about the world of money lending.
Stop Loan Sharks
Q: Can you tell us a bit about the Illegal Money Lending Team and the work you do to Stop Loan Sharks?
A: The enforcement team is funded via Birmingham city council, which consists of investigators who identify and physically go out and arrest illegal money lenders. From there, the team also takes away their criminal benefit and any money made goes back into the community for purposes such as research and outreach.
Q: Why do people turn to loan sharks in the first place?
A: People turn to loan sharks for lots of reasons. A lot of the times it’s because of a lack of access to credit or thought they were borrowing from a mate.
Q: Why are loan sharks dangerous?
A: Loan sharks are dangerous because the interest rates that they charge are so immense that they end up taking so much money that people can’t afford their bills and essentials. Additionally, being stuck in a loan shark situation takes a toll on one’s mental health. Getting attacked by loan sharks and constantly getting the reminder from them that “they own u” feels very daunting and can lead one’s mind to dark places.
Q: Has the need for the Stop Loan Sharks team increased in the past few years? If so, why do you think that has happened?
A: It takes people about 3 years to report so it's hard to tell where the sector stands right now. However, we have begun to see covid impact but not the cost of living crisis yet. Right now, the things we mostly see people borrowing for is food and fuel.
Q: How do loan sharks target people?
A: The targeting of people looking for money lenders used to be very predictable to find and keep track of, but now lenders are testing out new tactics that are harder to pick out, such as being on social media and manipulating influencers to promote them. They have a larger reach online and don’t even have to interact with the borrowers face-to-face.
Q: How can people avoid loan sharks, even if they’re desperate?
A: People can avoid loan sharks by ensuring that the lender has authority from the FCA. Ask, does this person lend lots of people money and do they charge interest rates? Also, be sure there’s legit paperwork, otherwise you may be doing business with an unauthorised and illegal lender.
Q: How can people report a loan shark if they suspect they know of one?
A: The Illegal Money Lending team has a 24/7 hotline open 365 days a year that is always answered by members of the team rather than automated messages. Additionally, there is a live chat feature on the website. People seeking guidance or reporting a shark can choose to be anonymous. There will be no judgment from the team; they just walk you through your options and tell you where to go from here.
Q: With the cost of living crisis, what advice would you give to people to manage their finances?
A: One of the big reasons people borrow is that they are in debt, but what isn’t widely acknowledged is that most people that you owe will work with you to create a repayment plan that works for you and your budget. Therefore, there’s no need to borrow more money!
Q: How do you work with victims of those affected by loan sharks? What support do you offer them?
A: First and foremost, we are a support system. We can refer those who reach out to us to other people for counseling and further help, but we will put in the work and put forth the effort to work through the situation and get it resolved.
Q: How would you describe a credit union or community bank to somebody who didn’t know what they were?
A: The Illegal Money Lending team is a massive advocate for credit unions and ethical lenders. People should be borrowing from here because their interest rates are capped. Additionally, credit unions send out loans every day that banks might not bother with, and they work with people as individuals. Credit unions will bend over backwards to help out their customers, which you won't get at large banks.
Q: What would you say sets a credit union apart from high street banks, for example?
A: Credit unions are unique in that they’re visible, known in the community, and it consists of local people helping local people.
Q: How does the Stop Loan Sharks team work with credit unions in the UK?
A: Once the team gets people out of their loan shark situation, they like to get people started saving with a credit union. Lots of people who get started with credit unions via the team continue to save the same way years later, which just goes to show the positive impact credit unions have on people. The team also runs campaigns and partnerships with various credit unions, and there is an officer dedicated to working with credit unions.
Q: Why is it important for Credit Unions in particular to raise awareness of loan sharks?
A: Lots of credit union members are simultaneously victims of loan sharks, so raising awareness can help prevent members from falling into traps like that.
Q: Are there any other places people can go if they are worried about their finances?
A: The team offers debt advice to loads of people, and credit unions can also be a big help for people looking to improve their finances.
Q: What is the biggest challenge facing credit unions at the moment?
A: Six months ago it would have been recognised because it’s difficult to market and get the word out on what credit unions are, but now it’s more about people getting declined for memberships and loans because of the cost of living crisis causing people to not be able to afford them.
Q: How could credit unions appeal to the younger generation?
A: Younger people tend to get misjudged; they’re actually a very ethical and aware generation that is more keen to be a part of and support these local organisations. Working with universities to get the word out about credit unions can also be beneficial for credit unions.
Q: Is there anything you think credit unions could try to reach more people?
A: It’s tricky to advertise nationally but to just continue going at the regular advertising and online social posts can help build the credit union’s reputation and status up.
Thank you, Cath, for taking the time to meet with us and sharing your knowledge about the IMLT, loan sharks, and safe money borrowing!