More than a million people in England could be borrowing from a loan shark – report

FILE PHOTO: Illustration photo of a British Pound Sterling note
FILE PHOTO: A British Pound Sterling note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration

March 21, 2022

LONDON (Reuters) – As many as 1.08 million people in England could be borrowing from a loan shark, more than three times the government’s most recent estimate, according to a report by a think-tank published on Monday.

The Centre for Social Justice (CSJ), while noting the difficulties of measuring illegal borrowing, said its estimate was based on a poll of about 4,000 people and an analysis of evidence provided by 1,200 known victims.

The last official report on illegal lending from the government in 2010 estimated the number of people borrowing from illegal lenders at 310,000 across the United Kingdom.

The CSJ said over a fifth of victims took more than five years to repay an illegal lender.

“We can expect this to get worse. The emergent cost-of-living crisis casts a looming shadow of financial anxiety,” it said in a report.

Finance minister Rishi Sunak is expected to address Britain’s worsening cost-of-living squeeze in a budget update on Wednesday, with inflation on track to top 8% after Russia’s invasion of Ukraine.

Britain’s lowest-paid workers have seen the biggest squeeze on their pay over the past 12 months.

The CSJ said illegal lenders were increasingly operating online, using social media to lure new borrowers, and that the vast majority of lenders ensure payment through psychological manipulation, coercion and by pestering borrowers.

The report said a small but significant minority use intimidation and violence. In many cases, illegal lenders had demanded a borrower deliver drugs or refer new clients to them, it added. Some had even asked for sex in return for the money owed.

(Reporting by Muvija M; Editing by William Schomberg and Andrew Heavens)