Crackdown launched on loan sharks (From Daily Echo)

Crackdown launched on loan sharks

7:05am Wednesday 24th October 2007 in

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A task force is being brought in to hunt down heavy-handed loan sharks and illegal lenders on estates in Southampton.

City council chiefs will give the go-ahead for the team to prosecute dodgy lenders, give victims protection to testify and help them find safer, lower interest sources of credit.

A pool of 14 investigators based in Birmingham will travel to Southampton under the Government-funded scheme while two financial inclusion officers will be based in the region.

A pilot project in Birmingham has shut down loan books worth £3m in the past two years, prosecuted 200 illegal lenders and supported 1,500 victims.

Cabinet member for economic development and regeneration, Councillor Royston Smith, said doorstep lending was widespread on poorer estates and "dodgy lenders" were a significant problem.

Southampton Test MP Alan Whitehead raised the issue in the House of Commons in December.

He said doorstep lenders were forcing low-income families to pay back loans with interest rates of between 160 and 800 per cent.

Mr Whitehead said people with no bank accounts, mortgages or credit ratings often turned to doorstep lenders, who had their place but needed to be reined in.

Southampton City Council's Tory Cabinet will authorise the project on Monday night.