The dangers of loan sharks to be taught in schools

 

Excerpt of cartoon which aims to teach children about loan sharks

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School children in England are to have lessons warning them against using loan sharks.

The Illegal Money Lending Team (ILMT) in England is offering schools ready-made lessons designed to warn their pupils about the danger.

The educational packs, which include videos, have been funded by confiscated money from convicted loan sharks.

More than 2,500 primary and secondary schools have already expressed an interest.

The Illegal Money Lending Team

  • Established in 2004
  • Based in Birmingham and investigates illegal money lenders across England
  • Has a 24/7 hotline - 0300 555 2222
  • Secured more than 300 prosecutions for illegal money lending
  • Helped over 23,000 victims
  • £42m of illegal debt has been written off

Yeading Junior School in west London has been trialling the lessons, which have been developed to raise awareness about the dangers of loan sharks and help children manage their money wisely.

In one classroom, when asked what a loan shark was, hands shot up in the air.

"A loan shark is an illegal money lender who is friendly to you but then after a while they turn nasty and put interest on the money they lent out," piped up 10-year-old Ariana.

Colourful wall displays about various aspects of personal finance adorn classrooms and corridors throughout the primary school.

The school's ethos was admired by Cath Williams who is spearheading the lesson plans on behalf of the IMLT.

"It's key to teach kids about financial education. What these lesson plans do is look at things like needing something and wanting something and also the difference between debt and credit.

"Hopefully if we can get those basic skills right then people won't need to go to loan sharks in the future".

Drawing pencils in a classroom Lessons are being developed to raise awareness of how loan sharks operate
Child drawing a shark Colourful wall displays are made by the children

The benefits of the classes could be two-fold believes head-teacher Carole Jones.

"When the children go home with the knowledge that they have from the classroom and the skills that they have been using, they will inevitably talk about that and parents will be able to clue into what the children are talking about and in turn make alternative decisions for themselves."

Illegal Money Lending

  • Estimated 310,000 families using loan sharks
  • £350 average loan
  • Estimated £700m a year being paid to loan sharks

Source: Policis/Illegal Money Lending Team

It is estimated that 310,000 families use loan sharks, typically borrowing £350 at a time.

But as the debts escalate to thousands of pounds, it is thought borrowers are paying £700 million a year to unlicensed lenders.

While teachers and schools can play their part in trying to cut off demand for illegal money lenders, action to tackle the supply-side of the problem continues.

Since first piloted 10 years ago, the Illegal Money Lending Team has secured 308 prosecutions and managed to get £42m of illegal debt written off.

Money and documents hauled from the raid The IMLT also helps to expose illegal money lenders

Last week, following a tip-off to its 24/7 hotline the IMLT made an early morning knock on the door of a house in Welwyn Garden City.

Trading standards officers, accompanied by the police entered the property and systematically searched through drawers and cupboards for evidence of unlicensed lending practices.

Two hours later, carrying a large see-through plastic bag, Head of the Illegal Money Lending Team Tony Quigley seemed pleased with the haul.

"We've found some documentation and some cash, potentially in to the thousands (of pounds), which will now go to the local police station where we'll do further examination."

Three suspects were arrested and released on bail until 26 June 2014 while further enquires are carried out.

While the IMLT has managed to help more than 23,000 victims of loan sharks over the past decade, its mantra is clear: teach our children about the dangers of getting involved with illegal lenders and you can limit the damage.

 

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  • rate this
    -1

    Comment number 255.

    What environments cultivate more loan sharks over those that enjoy fewer of them?

    If government abandoned its war on savings via; price fixing interest rates too near 0%, engaging in inflationary activities, and advocating a Keynesian "spend more" economy, we'd see less people driven into desperation, and a loan sharks' business.

  • rate this
    +2

    Comment number 254.

    I'm of the generation that attaches a stigma to any form of short term credit. Society now sees even something as trivial as paying for the weekly shop on a credit card as unacceptable.

    I know the pain credit can cause. A close friends marriage recently broke down because of debts he'd been amassing from a loan shark.

    I agree with the government that education is better than regulation.

  • rate this
    +12

    Comment number 173.

    I think kids should get taught about managing their finances in school. Never mind that a ridiculous number are currently leaving education with a terrible level of literacy & numeracy. We'll amend the curriculum to cover all the other stuff parents should be doing too.

  • rate this
    +26

    Comment number 169.

    If a bank won't lend you the money, there's a reason and it's the same reason why loan sharks charge so much - RISK.

    Pay Day loans cost so much because if you can't manage on this month wage, how are you going to manage next month, when you have the same expenses plus paying back the loan to cover last months? What you need is not a loan, just a few nights in with a book, rather than SKY.

  • rate this
    +10

    Comment number 152.

    This kind of approach is vital. I once worked in a debt recovery department and the vast majority of people I had to talk to genuinely didn't understand how finance works and how serious it was if things went wrong. Perhaps if they were taugh all this at school it would have helped. I would guess though that these lessons will be a one off rather than ongoing throughout the childs education.

 

Comments 5 of 9

 

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