Published: 00:01, 25 January 2017
More than 3,000 people are homeless in Kent, including an estimated 250 living on the streets. In the second of a series of special reports we focus on how so many end up in such a perilous situation.
Loan sharks are destroying the lives of vulnerable people and pushing many into homelessness, according to one of Kent's most influential figures.
There is evidence illegal money lenders are operating across the county and urgent action needs to be taken to stop them, says the Bishop of Dover Right Rev Trevor Willmott.
“If we could do something about illegal loan sharks it would contribute immensely to meeting some of the questions that surround homelessness,” he told KentOnline.
“When people fall into the clutches of a loan shark inevitably there are challenges in terms of their ability to pay debt and they get trapped in a process where they owe more and more and sometimes then find themselves evicted because they can’t pay their rent.
“Many people who are in debt to loan sharks think of them as being their friend because they have offered them immediate help.
“They don’t realise the consequences of accepting such monies with the exorbitant interest rates which usually follow.”
Experts say there are no exact figures for how many loan sharks are operating in Kent, due to the lack of documentation they keep about those they lend money to.
But last September Ian Kevin Carroll, from Gillingham, was jailed for fleecing at least 71 vulnerable people out of £200,000 with his criminal interest rates.
He had issued loans to at least 71 people over three years, demanding his “customers” pay at least double what they had borrowed.
“A lot of it is deeply hidden because it is deeply shameful,” said Bishop Willmott, who has backed a campaign launched in Swale to raise awareness about the dangers associated with borrowing from loan sharks.
“One of our pieces of work at the moment is to try and give confidence to people who are trapped in loan shark debt to have the confidence to come and talk.
“I think it is a much bigger and much more hidden problem than we have recognised so far.”
Bishop Willmott's comments come after KentOnline joined members of the Helping the Homeless All Over Kent group as they hit the streets to hand out essential items to people living on the streets.
The England Illegal Money Lending Team works with Trading Standards authorities across the country to crack down on loan sharks.
It estimates 310,000 households are affected by the problem and has helped more than 26,500 victims to write off £71.5 million worth of illegal debt in the last 13 years, securing 370 prosecutions.
Catherine Wohlers, a manager with the team, said: “There are two main problems with loan sharks – the first is financial in that quite often the loan is just a hook to get you caught and then they’ll just use it to extort money from people forevermore.
“We had a recent case where the APR the guy charged was 4.2 million per cent and that’s not uncommon.
“Quite often we have dealt with people who have borrowed £400 or £500 and ended up paying back tens of thousands, that’s a big, big problem.
“The second problem is the emotional impact of being the victim of a loan shark.
“We know that loan sharks like to gain control of people. We know they threaten them, they threaten what’s important to them.
“That can be threats of violence, it can be threats to their reputation. It can be all sorts of different things.
“Victims can end up feeling really isolated and really low and even on the brink of suicide.”
Ms Wohlers said loans without paperwork, those where the amount owed keeps growing no matter what the borrower does, or when the lender does not make clear exactly how much needs to be paid to clear the debt are all huge warning signs.
She advised: “The first thing is never borrow to get out of debt.
"We had a recent case where the APR the guy charged was 4.2 million per cent" - Catherine Wohlers
“So if you’ve got debts from Christmas or rent arrears or anything else speak to the people you owe money too – they will find a way for you to repay them, even if it’s a very small amount over a very long period.
“The danger is when people bury their head in the sand, that’s when they can end up in the grasp of loan sharks.”
One organisation committed to helping combat the problem is the Maidstone-based Kent Savers Credit Union.
Set up in 2010, it runs on a not-for-profit basis, and provides affordable financial services to people in Kent, Medway, and Bexley.
It promotes saving accounts and offers loans at reasonable rates as an alternative to using loan sharks and payday loans.
General manager Chris Hunt says loan sharks often ply their trade in pubs.
“When you go to a loan shark it all seems quite innocent at first, it is only when you miss a payment that things start to get violent,” he said.
“It is important people know we are there help.
“We have been going for six years and we are constantly growing.
“We are up to 3,000 members and in the next 18 months we expect that to be up to 4,000 as more people get to hear about us.”
The union looks after £1.35 million of people’s savings and has also lent out £1.2m in loans.
“One of our accounts is a Christmas one where people save once a week or once a month and the money is only released in November,” said Mr Hunt.
He openly says the union doesn’t have the lowest interest rate, but offers flexibility and understanding that customers won’t get from a bank should they run into difficulty making repayments.
It also lends to people with low credit scores and those considered ‘high risk’ who may be shunned by banks.
“We think we are more flexible if a client wants to miss a payment, we look at their circumstances,” said Mr Hunt.
“We are not a commercial body like a bank we are a co-operative.
“Every time someone opens an account they become a member.
“The interest we get from our loans provides all the money to keep us going.”
The England Illegal Money Lending Team runs a 24-hour hotline seven days a week for people worried about debts, available on 0300 5552222.
Every morning at 10am we play you an hour of tunes from the 90s. We call it, #WeLoveThe90s.
Play 'Say It' with Garry and Laura on kmfm Breakfast and you could win £1,000!
Wake up to kmfm Breakfast with Garry and Laura - it's Kent's alarm call.