Loan sharks lurking in the DWP office as they target victims facing higher bills

Up to a million people turn to illegal moneylenders to pay their bills despite sky-high interest rates. Three quarters of the victims receive social assistance. Ten years ago 300,000 used loan sharks

Unscrupulous loan sharks gather in front of welfare offices to nab desperate victims.

They were spotted in an office of the Department for Works and Pensions and even followed a woman home.

Up to a million people turn to illegal moneylenders to pay their bills despite sky-high interest rates.

Three quarters of the victims receive social assistance. Ten years ago 300,000 used loan sharks. Sylvia Simpson, of Leeds debt advice center Money Buddies, said: “They are like vultures. They hang around the DWP offices waiting for people to come out.

“It’s a crisis situation. Every day people come in without food or there are bailiffs knocking on the door.”

A woman was followed on a bus from her DWP office in Leeds and then tricked into taking a £50 loan to buy groceries.

She changed her mind and went to a debt counseling center in town, which paid off the loan.

Ms Simpson told of a client where the loan shark waited for her child outside the school gate because he was a family friend. She said: “The mum had come after him and she was really intimidated. That’s the kind of thing they do.

“They borrow £50 and they come back the following week and ask for £100. It’s getting out of control and people don’t know what to do.”

The authorities have hit back in some cases. This month, 10 investigators from the England Illegal Money Lending Team, assisted by police officers, seized £3,000 in cash and papers in Oldbury, West Midlands.

A 47-year-old woman was questioned about illegal money lending and released pending further investigation.

The Center for Social Justice think tank said lenders often pretend to be friends before demanding double the amount back a few weeks later. CSJ’s Joe Shalam said increasing household pressures, lack of savings and increasingly restricted credit facilities “can unleash a perfect storm” in which people are exploited.

Four in ten households will face fuel poverty this autumn when energy bills, already up 54% to nearly £2,000, are expected to rise by a further £600.

The CSJ is urging a crackdown on illicit lending, including expanding EIMLT operations and encouraging more credit unions to help those at risk. She has also urged the government to renew its fight against loan sharks.