With high street banks and building societies refusing riskier lending, many women are finding it difficult to feed their families and resorting to financial ‘help’ from illegal money lenders in an attempt to survive the immediate struggles.
But with astronomical interest rates for repayment, for many women the struggles are only just beginning.
Cheshire loan shark, Paul Nicholson, hit the headlines in 2009.
He was jailed indefinitely after committing a range of charges including specific offences against his female clients.
His firm would charge clients up to 125 per cent interest on loans and he would instill misery and fear in his clients.
Blackmail, assault and rape were used to ensure he received payment from his clients for outstanding debts.
The former nightclub doorman would threaten his female clients with petrol bombing their houses and told one distraught debtor: ‘Your priority is to pay me, not feed your kids.’
He forced one woman to perform oral sex on him and told another she could work as a prostitute to pay off debts.
Many did. If you were confronted by a man standing on your doorstep with a baseball bat, a knife or a knuckle duster you would probably do exactly the same.
James Stone, a Bradford loan shark a Bradford loan shark displayed similar dispicable immoral behaviour to his female clients, telling one woman to sell herself for sex so she could repay his exorbitant fees.
She laughed it off but he quickly corrected her stating: “I’m not joking. I have no morals.”
Sally (not her real name), a woman in her late fifties, spoke to me about her experiences with a North East loan shark.
Sally is an ordinary woman, a mother or two girls, a grandmother of four. She could be your neighbour, your colleague, your sister.
She and her husband took out a £250 loan from an illegal money lender for Christmas presents for their children and grandchildren.
Sally explained how the amount owing quickly escalated to £2000 and how meeting the increasing repayment amounts became increasingly harder.
“We became really desperate. We couldn’t meet his demands. He’d turn up whenever he felt like it and his threats were starting to get really scary.”
Sally and her partner were signed off from work with depression. Money was quickly running out and they were running out of options of how to find the money demanded by their lender.
Sally and her partner felt there was no other option but for her to sell her body on the streets to strangers.
“I didn’t want to do it, but what option did we have? How else were we going to get the kind of money he was demanding quickly? We had no one to turn to – we didn’t know what else to do.
“When you’re desperate, you do desperate things.”
Sally’s husband would deliver her to the streets of a north east town every Tuesday evening.
One night, she was picked up by a male client and taken to a derelict factory where she was raped and assaulted with a baseball bat, then left bloodied and collapsed on the concrete floor.
Sally, still with a tremour in her voice, explained how she managed to call for help after waking from unconsciousness, confused, cold and scared for her life.
After a couple of weeks in hospital she recovered from her injuries, but whilst the physical scars healed, her life has changed forever.
Sally now often self-harms, drinks heavily and admits she has gradually become more and more violent towards her partner.
As a consequence of her alcohol use and violence, she is now subject to a community order and involved in the criminal justice system.
She is on medication for depression, suffers with anxiety and panic attacks and struggles to leave the house.
Despite this horrific experience, the loan shark has insisted the debt is still owing.
Some months on and Sally is terrified of involving the police, living in constant fear of the man she and her partner owe money to.
The £250 originally borrowed is still not paid off and the debt is escalating at an alarming pace.
Sadly, Sally is not alone. Incidents like this are not as isolated as one might think.
Vulnerable women are increasingly turning to prostitution as a means of protecting themselves and their families from illegal money lenders.
Lucy Haughey, Director and Co-Founder of The Plan B Partnership, a financial and debt guidance service said:
“Every woman we see at our money guidance service has some sort of money worry – I can confidently say the volume of unethical lending cases we see has certainly gone up by about 25% in the last 2 years in particular.
“One issue with loan sharks is the terminology, it depicts an image of a sleazy greasy guy of a particular type on your doorstep.
“Loan sharks are smarter than this – they do not approach you & appear suspicious, unethical or dangerous until you owe them money; often they are online, they have websites and 0845 numbers, they use social media like Twitter & Facebook and they seem regulated, safe and trustworthy.
Lucy goes on to explain: “If women can just be more aware of the range of unethical and unlawful lenders & how assumptions of what they look and act like can mislead them, this will greatly help women and men protect themselves from choosing this credit option.
“When we see women with debt issues they rarely have one debt (to a loan shark or loan company). On average they have eight debts – a cluster of payday loans, borrowing from a “mate” who can become a shark, and credit and store cards.
“The key is to remember debt is a slippery slope – borrowing more money or using more credit to get by, pay bills or manage other debts is not a good idea.
Lucy’s advice: “If you have one debt, stop it in its tracks & get advice as you are less likely to get desperate and be vulnerable to making silly choices and mistakes.”
Talking to Lucy highlights the reasons why women are vulnerable to falling prey to illegal money lenders. She said:
“We see women do things like try & keep up the pretense of a “good” lifestyle and simply not cut back but take out more credit to try and appear to be able to manage.
“We see women cut back on things that they enjoyed in the past and this leads to frustration, isolation & ultimately depression.
“We see women lie to their partners and even walk away from jobs and relationships which they claim places pressure on them to stop hiding their financial crisis.
“We see women who become blinkered with panic – the fear and desperation means they don’t think clearly so budgeting goes out of the window and they bump from money problem to money problem.
“They go “ostrich” and then ignore the issues and we all know debt grows when left alone and it grows fast.
“It’s the “ostriches” we really worry about at Plan B as they are the hidden vulnerable people many advice services don’t reach.”
How you can avoid falling prey to illegal money lending:
- If you are struggling to cope financially consider seeking outside help. Fresh eyes on your finances can do wonders and its what experts are for!
- Don’t borrow from vague friends, neighbours or family if you can help it. Things can get very messy when you don’t really know the person who has loaned you money.
This is what happened to Sally – she loaned from a man known to her partner, a supposed friend of eight years.
- If you are cold called by phone, email, social media or directly on your doorstep by anyone offering you any sort of credit it is highly likely this person or company is not legitimate.
When they are not legitimate they are not regulated and you have no “come back” from regulators like Trading Standards.
In fact, your only port of call would be Police and even then they need two pieces of evidence of wrong-doing to help you.
- If you need credit only ever borrow from companies displaying a Consumer Credit Licence number. Ideally use a financial advisor who is also FCA regulated.
- Regulation protects you and the borrowing process. If you are approached by a lender ask them for their CCL number & you can check it online or by calling the Office of Fair Trading.
- If you need credit, ask yourself ‘do I really need it?’ Is it a life or death situation? Will it genuinely enhance my life? Nothing is worth the risk of unsafe borrowing.
- Any advice you are given when borrowing ideally should be face to face and you should have time to “cool off” after appointments.
- Pushy sales & over the phone “advice” is not worth the risk. You need to have time and space to think, ask questions and consider the trustworthiness of the lender.
With thanks to Lucy Haughey firstname.lastname@example.org Director and Co-Founder of The Plan B Partnership for advice. The Plan B Partnership help people of all social circumstances access financial guidance and debt guidance free of charge.
To report a loan shark in confidence contact Stop Loan Sharks 0300 555 222
Or email: email@example.com
*This piece was originally written for and published by Women’s Views on News on 21 August 2013