Loan sharks 'target poor tenants'

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The woman borrowed money from a loan shark for Christmas presents for her children

Housing associations say loan sharks are targeting their tenants because they are some of the poorest people in Wales and cannot get money elsewhere.

Community Housing Cymru is launching a campaign warning tenants not to borrow from lenders who may turn to violence and intimidation if borrowers default.

The campaign estimates 15,000 people borrow money from loan sharks annually.

In 2008, the Wales Illegal Money Lending Unit was established, and has arrested 36 loan sharks to date.

Community Housing Cymru (CHC) represents housing associations in Wales, and 18 of its members have been involved in setting up a new community finance initiative, Moneyline Cymru, providing advice and credit for people who cannot get loans from banks.

ONE WOMAN'S STORY Mother snared by sharks "The kids wanted Christmas presents. Their friends say things like your mum can't afford to buy you things, and it's hard. "You want them to have the same things as the other kids and that's when I went to the loan shark. When I couldn't pay the money back, they started to threaten me. "The loan shark said they'd send people around and burn my house down with me in it. They said they'd cut me with a knife. "Every time I asked them if I'd finished paying, they said they didn't have the book. They couldn't tell me how much I owed. They threatened me, they really frightened me. No matter how much you need the money, don't go to them."

CHC chief executive Nick Bennett has said lenders will approach people as they are moving them into their new home, offering them money to buy items such as washing machines, fridges and freezers.

Loan sharks can then charge interest rates running to thousands of per cent, making it impossible for borrowers to repay the loan.

"Tenants have been threatened, intimidated, some have even considered suicide because of the impact that these loan sharks have had in charging exorbitant rates and then demanding the money back," said Mr Bennett.

"There's certainly evidence that loan sharks do target our tenants."

He said about 15,000 were in the grip of loan sharks, while a further 150,000 borrowed from doorstep lenders, who charged interest of up to 200%.

Last year, a man originally from Bangor was jailed for two years for running a money lending business without a licence.

Mold Crown Court heard that he charged people an annual percentage rate of up to 149,000%.

Steve Tooby, who heads the Wales Illegal Money Lending Unit, said: "We will come after them and that's my message to loan sharks.

"You start persecuting some of the vulnerable people in Wales, and we will persecute you."

The campaign, Don't get bitten by loan sharks, is being launched at the Senedd, and will feature television adverts and posters around Wales.