Money lenders writing sex demands into loan contracts

Research has found that more than a million people are in hock to loan sharks, and also found some illegal money lenders demand sexual favours via repayment contracts with borrowers.

According to the Centre for Social Justice (CSJ), a centre-Right think tank, around 2.4 per cent of the population – or 1.08 million people – admitted they had borrowed money outside the conventional banking sector, from "someone locally who charged interest."

The total is higher than previously thought by 700,000 and includes middle-income families, and the CSJ fears more people will fall into the hands of loan sharks when the cost-of-living crisis hits. Half (45 per cent) of those who borrowed from illegal money lenders used the cash for everyday expenses and household bills.

The CSJ found the money-lending criminals used coercive, violent, and underhand tactics to enforce repayments, ranging from sex-for-loans and physical assaults to threats to set bullies on borrowers' children at their schools.

According to the CSJ's report - which was based on interviews with moneylending investigation teams, a database of 1,200 victims and a poll of 4,000 adults - some 10 per cent of borrowers have provided sex for loans or signed agreements to provide sexual favours if they defaulted. Some neighbourhood loan sharks exploited school networks to target victims by identifying "which of their children's friends were hungry or didn't have the best shoes."

Obtained by an investigation team, one template contract for a £25,000 loan said: "Interest on the loan capital will be rendered in kind, with Ms X agreeing to provide sexual gratification for Mr Y. Such services will be available upon request at every loan repayment."

One victim, 38-year-old Anna, told investigators: "I am scared of what he can do. I had to sleep with him because I could not afford the payments. I feel unclean… I knew it was wrong, but he took a photo of my daughter coming out of school and sent it to me saying 'we now know what she looks like'."

In one case, a woman borrowed £3,000 to pay off her brother's loan but repaid £20,000 over three years. Another borrowed £3,000 and repaid £18,000 in instalments over five years. Repayment of loans can take up to a decade, and the CSJ said more than a fifth of victims found themselves repaying an illegal lender for more than five years, seven per cent of them had been repaying a lender for more than 10 years.

The CSJ recommended a national campaign to highlight the scale of the problem, and scaling up investigation teams and extending legitimate financial support schemes for those at risk from loan sharks.
 

Mandy Peters Solicitors 

Lewisham

020 8297 4414