We have all heard tales of how loan sharks operate, but rarely do we get a true insight into the day-to-day operation of loan sharks and how this impacts their victims. This blog details the true to life experiences of one anonymous loan shark victim. We hear from her how she was lured into the shady financial arrangements that would later cause her life to be ruled by fear and worry about debts she had no control over.
Christmas around the corner and struggling for money
In 2000, Debra Smith (not her real name) and her carer husband had four children and were struggling financially. They did not go out looking for a loan, however when they mentioned to a family friend that they needed some spare cash for Christmas, they were informed about a local man who offered loans to struggling families. Unbeknownst to them their friend put them in touch with a local loan shark who gave them £500 in cash. No terms were explicitly agreed or explained to the family which left them under the impression they could repay the £500 when they had a bit more spare cash.
The aftermath of dealing with a loan shark
After a few weeks the family were contacted and twice the original amount loaned was demanded. The loan shark had started to bear its teeth! After a few months the family were repaying over £1000 each month and when the loan shark demanded more money, the family asked for some respite. However, there was no compassion shown and the loan shark threatened that he may have to sell the loan on to others who would use physical violence to recoup their money.
Frightened and unsure of what their legal rights were, the family struggled on and continued to repay over £1000 pounds in interest a month – a staggering amount given that the original loan sum was just £500. As they were struggling to make the repayments of interest, they were never any closer to replaying the original sum and as every month passed they were in fear that their home would be attacked.
The stress of the situation was later to affect Debra’s health and she suffered as stroke in 2005. Several strokes followed, however the loan shark showed no understanding whatsoever and continued to threaten the family even further. At this stage the family were threatened that the loan would be sold on to people who would physically attack Debra and members of her family to recoup the debt and the interest payments.
Biting back: the family contact the police
After 8 years the family decided to contact local police, who informed them that the loan shark arrangement was unlawful and he never had any right to demand the money back in the first place. However, this was no comfort to the family who by this stage owed £1200 in monthly interest alone and were no closer to clearing the original debt. At this stage, Debra and her family had already repaid over £128,000 over a period of eight years.
2009 and the tables turned on the loan shark
In August 2009 the table turned on the loan shark, when police raided his property. They found and confiscated hi tech TVs and luxury cars; he had been spending the money repaid by struggling families, living in luxury! In late 2009 the loan shark faced court and pleaded guilty to harassment. He later received a suspended sentence and was ordered to repay Debra 1500 a month, or else face prison.
A nationwide problem?
This story is the true-life experience of a victim of a loan shark in modern Britain. It is shocking and even more shocking is that these kinds of experiences are more common than many of us may imagine. Typically vulnerable people fall victim to loan sharks, for example people who are poor and don’t qualify for more conventional credit, or people who are in the country illegally and have no chance of getting a conventional loan. In such circumstances, it is equally shocking that so many people focus a critical eye on payday lenders like Wonga, who offer loans to people who, otherwise may never qualify for a loan, and on reasonable terms that are fully explained by the lender. Perhaps more attention should be paid to loan sharks who resort to crime, violence and harassment in order to recoup illegal loans?
Leave a reply!
What are your views? Have you fallen victim to a loan shark, or have you ever used a reputable payday lender? Please feel free to leave a comment or a reply and remember that this story is a true life account of how one family was affected by a loan shark. Only names have been changed.