Scottish Illegal Money Lending Unit expands network to crack down on loan sharks

The Scottish Illegal Money Lending Unit (SIMLU) has launched a new dedicated advice site to support Scots who are struggling to deal with loan sharks.

The unit has also expanded its network of organizations operating in the communities that help residents safely report illegal loan sharking activities.

The new recipients of the Stop Loan Sharks Scotland Charter Mark are social enterprise Scotcash and the charity Grampian Regional Equality Council (GREC) in recognition of taking a zero tolerance stance on illegal money lending to the within their communities.

Throughout the pandemic, many illegal lenders have moved online, using ads and social media posts to take advantage of those who are most vulnerable.

While loans from these online lenders can be seen as a quick fix for people in crisis, the lenders may not be licensed by the Financial Conduct Authority and could charge huge interest rates.

On average, loans from illegal lenders cost three times as much as a legal loan.

The goal of the SIMLU Charter is to create a network of organizations actively seeking to uncover and combat illegal loans and, more importantly, to prevent people from using loan sharks in the first place.

The unit’s new website has been created to provide dedicated advice and support.

Fiona Richardson, Managing Director of Trading Standards Scotland, said: “I am delighted that the Scotcash and the Grampian Regional Equality Council have signed the Stop Loan Sharks charter.

“We will work together to promote the message that you shouldn’t use loan sharks, but also to make sure that when someone has ended up using an illegal money lender, they know where to go for help and appropriate assistance.

“In a time of great financial uncertainty, it is important that we take all possible measures to prevent people from borrowing from loan sharks and getting trapped in a cycle of debt and bullying.”

Sharon MacPherson, Managing Director of Scotcash, said: “We recognize the importance of taking a zero tolerance stance on illegal money lending in our communities.

“This has enabled us to better support people vulnerable to illegal money lenders, at the heart of which are those who urgently need to borrow money but lack alternatives.

“In the longer term, this has helped create conditions that may lessen the use of illegal money lenders. “

SIMLU is part of Trading Standards Scotland, which is based on the Scottish Local Authorities Convention (COSLA). It is financed by the Treasury through the tax imposed on credit companies authorized by the UK government.

Don’t miss the latest headlines with our twice daily newsletter – subscribe here for free.

About the author