Highways & Neighbourhoods Cabinet Member – Minutes – 15 June 2011
The Consumer Credit Act 1974 governed the UK’s consumer credit industry. It regulated who could engage in credit transactions and laid down rules regarding advertising, form and content of agreements and the procedures to be followed if customers defaulted. All those engaged in the industry needed to be licensed by the Office of Fair Trading and considered to be a “fit and proper person”.
It was explained that those engaged in illegal money lending were commonly known as ‘loan sharks’, they did not have a credit licence or comply with any of the rules. Illegal money lenders targeted low-income households and the most vulnerable members of society. Interest rates, the annual percentage rate (APR), were often in the hundreds or over a thousand percent, multiple loans were frequent and payment records rare, therefore borrowers usually had no idea how much they owed and when a loan was repaid.
The Government set up two pilot schemes, one in Birmingham, the other in Glasgow to find out the extent of the problem and see how best to bring the loan sharks to justice. The initial pilots exceeded Government’s expectations and funding was provided to extend the initiative into other areas of the country. In 2008, the Birmingham IMLT began operating in the North Lincolnshire area and in other authorities in the Humber sub-region.
The Director of Neighbourhood and Environmental Services advised that discussions had taken place with Trading Standards staff both regionally and locally and there was general agreement that this initiative was worth being involved in.
Resolved – (a) That the proposal to extend the remit for the Birmingham City Council’s IMLT to investigate and institute proceedings against illegal money lenders operating within North Lincolnshire be approved, and (b) that in accordance with delegated powers the Director of Neighbourhood and Environmental Services, authorise members of the IMLT to enforce the provisions of the Consumer Credit Act and agree and approve any necessary protocols.