Grim underworld of loan sharks where victims live in fear of lenders
Those who investigate Wales’ unlicensed money lenders have witnessed disturbing tactics to exploit vulnerable people, from kidnapping to payment in the form of sex. Conor Gogarty reports...
IT DID not take long for Ryan Evans to realise the scale of exploitation wreaked by Welsh loan sharks.
His first case after joining the agency that prosecutes Wales’ illegal lenders still sticks in his mind as one of the darkest.
An elderly couple from Caerphilly had gone for debt advice at the Citizens Advice Bureau, where staff were so concerned by what they heard that they contacted the Stop Loan Sharks Wales agency.
“When I went to see the couple, they were in a damp house in winter and both had chest infections,” says Ryan.
“The husband had Parkinson’s and the wife had mental health issues. Both had attempted suicide in the previous months.
“The only food in the house was a sack of potatoes.”
When Ryan asked how much they received in benefits, they replied that they did not know.
Their lender, it turned out, had their cards and would go to the post office on benefit days to empty their accounts.
Over a 10-year period, he had deducted a staggering £92,000 from their benefits.
The loan shark investigators started surveilling the unlicensed lender and discovered he was doing the same thing to other “clients”, travelling to different post offices to take their benefits.
He was jailed for 15 months and ordered to pay back £66,000 to his victims.
Almost a decade on, Ryan, 43, can reel off a long series of similarly shocking investigations he has worked on – including a lender who demanded an interest rate of 400,000% and one who took payment in the form of sex.
Ryan and his Stop Loan Sharks Wales colleague Sean Spiteri, 56, spoke with us about the most harrowing cases of their careers and the tactics that are used to manipulate some of the most vulnerable people in society.
“The soaps run the loan shark storyline on a semi-regular basis, but in reality you very rarely see that sort of cartoon gangster,” says Ryan, whose role largely involves supporting victims.
“In Wales especially, you tend to find the loan sharks are a big fish in a small pond.
“They have a position of authority in their social group.”
One such example is Horace Taylor, a 73-year-old retiree who charged “double bubble” interest – demanding his debtors pay double the amount they borrowed, and sometimes even higher rates.
Taylor, who had never been authorised to lend money, met his victims in pubs he frequented in Cwmbran and Pontypool.
Those victims had serious health issues and relied on benefits.
Taylor told one of them: “You owe me another £500 – if I don’t get it, I’m gonna get the boys to smash up your house.”
Earlier this year, a judge handed Taylor a suspended prison sentence and ordered him to repay the £1,760 in interest he had taken from three victims.
Ryan says the case was not just about threats of violence – more significant, he believes, was the “peer pressure” stemming from Taylor’s status as a well-known and popular figure in local pubs.
“He didn’t have to present himself as threatening,” Ryan adds.
No evidence was found to substantiate that Taylor ever had any “boys” to send around.
The insidious combination of peer pressure and threats is, according to Ryan and Sean, “quite typical”.
Another illegal lender who fitted that description was Tabitha Richardson – an 83-year-old from Newport who charged people 40% interest on 28-week loans.
Seven victims had paid her a total of £126,000.
“She looked like a frail old lady, but you wouldn’t be thinking that if you heard the messages she left people,” said Ryan.
As previously reported, her warnings after people missed payments included, “you know I can find you” and “let me know what’s going on before I come looking for you”.
But Sean believes shame played a more important role than fear.
“For some reason the victims felt they had a duty to pay her, more than it being down to threats of violence,” he said. Why? “She played off old school values, things like, ‘If you don’t pay I will tell your family members,’” replied Ryan.
Two of Richardson’s victims were living off just £100 a month.
Earlier this year she was given a suspended sentence and next month there will be a hearing to decide any compensation she may have to pay.
Legitimate lenders will carry out affordability tests and provide paperwork so customers can keep track of what they owe.
But with loan sharks, Ryan says, there is a “deliberate fog”.
For example, Taylor “tried to project an image of officialdom” by carrying ledger books – but they were “almost props”, filled with nonsensical scrawling.
His numbers were being “made up on the spot”, adds Sean, who has been an investigator with Stop Loan Sharks Wales for six years.
Another loan shark from Hengoed, in Caerphilly county, targeted eight members of his own family over more than a decade.
The exploitation would begin with small loans like £10 and end with the lender “helping himself to all their benefits” – leading to an eventual interest rate of 400,000% for one victim.
Ryan said: “The loan shark was the only one in the family who could read, write and drive.
“Because the victims had learning difficulties, he could take their cards off them, drive them to Morrisons and decide what would go in their trolley. “The rest of the money was for him.” Sometimes teenagers begin adulthood owing a loan shark because their family has built up so much debt to that lender.
One disturbing case that Ryan recalls saw a loan shark “take a liking” to a much younger woman who was “in essence pimped out” by her family in an attempt to settle their debts.
The woman, who had learning difficulties, did not want to press a sexual offence charge, though the shark was convicted of illegal lending.
Payment in the form of sex is “uncommon”, Ryan adds, but the agency’s intelligence indicates there is at least one active loan shark engaging in the practice in South Wales.
“Organised loan sharks want to turn you into a cash cow,” said Ryan.
“It’s pitched at just the right level because they know your income. When you miss a payment it might get doubled. But they also know not to push too far.
“If you’re going to be evicted, they will come in like the white knight. They know a family of four means four income streams. It becomes a cycle where you’re borrowing your own money to survive.”
One tragic case saw a woman in her 50s turn to a loan shark because she was unable to pay for her partner’s funeral.
The rate was “double bubble” and then “penalty points” were added.
Her landlord contacted the agency because she had stopped paying rent and was in danger of being evicted.
“We met up with her twice,” said Ryan. “She decided she would rather cash in her pension early than tell us who the loan shark was.
“In her words: ‘If they find out I’m a grass on this estate, life won’t be worth living.’”
Ryan said victims “very regularly” break off contact with the agency due to fear of retribution.
When he and Sean visit homes they dress like tradesmen rather than clipboard-carrying officials.
“We don’t want to look like we’re from the council, because curtains twitch on some estates,” he adds.
“One person was so nervous, we agreed to meet them at a McDonald’s
two towns away and we paid for their taxi.”
One loan shark operated in Caerphilly’s deprived Lansbury Park estate and lent out more than £200,000 in just three years.
His methods of intimidation included carrying a baseball bat and slowly driving past his debtors.
Despite “never working a day in his life” the lender was living a “luxurious lifestyle”, said Ryan, as well as claiming benefits and a disability vehicle.
When the agency raided his council house, they found Rolex watches and £20,000 in cash. The lender had just bought a caravan for £18,000 – which Stop Loan Sharks Wales sold at auction.
The case resulted in a jail term of three and half years.
Sometimes loan sharks lie that they have a lending licence.
Two brothers had pretended to continue their family’s lending business after their father retired, but in reality the company had closed. The brothers drove vans around South Wales, building a network of more than 130 victims and charging “very high interest” before getting suspended sentences, said Ryan.
The investigators said another pair of brothers were bare-knuckle fighters in Cardiff, who terrorised their victims and took a total of £150,000 in repayments on loans of just £20,000.
On one occasion they put a bag on a man’s head, placed him in their van and drove him to the south-west of England in an attempt to scare him into paying.
After escaping, the man needed protection from the authorities.
Both brothers were jailed for their illegal lending.
Before the cost-of-living crisis, most people who turned to loan sharks had been hit with an unexpected cost, but now many are borrowing for everyday living costs, according to the agency, which has identified £1.3m in illegal loans across Wales in the last two and a half years.
Sean said the biggest hurdle the team faces is the peer pressure that makes people reluctant to get help. Urging victims to come forward, he says: “The big thing to get across is that nothing will change unless they make a change.”
Ryan adds: “You’ve got to remember that they can’t make you pay. They can’t take you to court.”
The investigators say compensation is always prioritised when loan sharks are prosecuted. In its 15-year history, Stop Loan Sharks Wales investigations have seen £480,000 in compensation go to victims.