19 Apr 2023 | Posted In Money advice news

Think tank Centre for Social Justice has published a report entitled ‘Friend or Foe? Equipping debt advisers to tackle illegal money lending’ in response to their recent survey which found that 7 in 10 debt advisers believe that illegal lending is a growing problem in the UK and over half of debt advisers have been told about a loan shark by a client.

The report sets out a new framework for debt advisers to discuss illegal money lenders with their clients based on the acronym ‘FRIEND’:

Friend – Is the lender really a friend? What happens if the client does not pay?
Repeat – Does this lender lend to more than one person. Has the client borrowed from them before?
Interest – Does the lender charge interest or extra charges? Do these charges change?
Evidence – Has the lender provided any evidence of the loan?
Nervous – Does the lender or talking about the lender make the client nervous?
Disruptive – Is the lender a disruptive figure in a client’s life. Do they represent a danger to the client?

It also makes a series of recommendations for tackling illegal money lending on a wider scale:

  • Recommendation 1: The Government should launch a national advertising campaign to highlight the presence and dangers of loan sharks, as well as the support available from the Illegal Money Lending Team (IMLT).
  • Recommendation 2: Illegal money lending should feature as part of a debt adviser’s introductory training.
  • Recommendation 3: Additional training for debt advisers should be focussed on the confidence to directly ask about illegal lenders.
  • Recommendation 4: Debt advisers should commit to directly transferring clients to the illegal money lending teams where they report an illegal lender.
  • Recommendation 5: Debts to an illegal money lender should be added to the Standard Financial Statement.
  • Recommendation 6: Debt advice agencies should implement a new framework for investigating an illegal money lender.

Read more here.