Wednesday 6 July 2022 06:24 AM We join the police to hunt the loan sharks charging 100,000% interest trends now

It is just before 7.30am when two police vans and two unmarked vehicles pull up on the corner of a residential street in Lancashire.

Five officers wearing stab-proof vests and carrying batons jump out, creep down a narrow cobbled road and cautiously approach a small terrace house.

One raps on the door, while two stand behind him armed with a battering ram.

The other two position themselves in the back garden in case their suspect attempts an escape. At first it looks as though someone has blocked the front door. 

But the officers are soon inside and emerge just ten minutes later escorting a musclebound, heavily tattooed man in handcuffs.

The man, in his 30s, grimaces as he is walked towards the back of a van and driven away to nearby Colne Police Station.

I’m witnessing one of around 50 raids carried out every year by England’s Illegal Money Lending Team (IMLT), a specialist branch of trading standards tasked with tracking down loan sharks. Wales and Scotland have their own divisions.

And the teams have never been more in demand. As the cost-of-living crisis bites, scores of households are turning to credit cards and loans to cope with soaring bills.

Just last week, Bank of England figures revealed that consumer borrowing has now returned to pre-pandemic levels, with £5.7 billion of debt built up between January and May this year.

But an estimated 1.08 million people are borrowing from illegal lenders, according to think-tank the Centre for Social Justice (CSJ). Many are struggling to make ends meet, vulnerable and unable to get a loan or credit card from a bank.

CSJ data shows four in five debtors who tried to borrow from a regulated lender before resorting to a loan shark had been rejected by the bank or building society. 

But these crooks routinely charge victims extortionate interest rates of as much as 130,000 per cent, according to IMLT.

And the consquences for missing payments can be devastating, with some criminals threatening physical or even sexual violence. As prices continue to spiral, experts fear more households could end up in these crooks’ clutches.

Matthew Greenwood, head of debt at the CSJ, says: ‘Desperate people’s need for cash does not dry up just because they can’t access it. 

If someone is unable to access money from a legitimate lender — perhaps because they have a poor credit score or they need the money quickly — they may well turn to a loan shark.’

The raid last Tuesday begins with a two-minute briefing at Colne Police Station at 7.15am.We crowd into a small meeting room where five police officers and four IMLT members gather around a big table. 

Tony Quigley, head of the IMLT, explains they have a search warrant for a suspected illegal lender, along with permission to use force to enter his property.

If he is home they intend to arrest him and then take away any potential evidence such as paperwork, computers and mobile phones.

On some raids, dogs trained to sniff out wads of cash are also used, though not today.

Mr Quigley concludes the meeting by saying: ‘What I hope is this morning will go fairly calmly, that the individual will cooperate and we will be able to do our job.’

It’s just a five-minute drive to the suspect’s house. Once arrested, he will end up being questioned for most of the day. 

Meanwhile, seven IMLT investigators scour his property for evidence. There is a woman inside staring anxiously out of the window and a dog barks loudly.

Across the road a neighbour is filming the scene on a phone.

Officers soon find something of interest in the boot of his Jaguar sports car. And after an hour inside the suspect’s house, they bring out bulging evidence bags.

The IMLT investigators cannot tell me what they have found. But one says they discovered around £20,000 of cash stuffed inside curtain poles on a previous raid. And on another occasion they found £50,000 distributed between two jewellery boxes.

Mr Quigley tells me loan sharks can amass anywhere between a dozen and 1,000 borrowers, raking in millions of pounds a year from inflated interest charges. 

They typically lure in victims via word of mouth. Some prey on people living in impoverished areas or work colleagues, who may then recommend the illegal lender to another friend or relative in need of quick cash.

Many crooks also use social media platforms such as Facebook,

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