Concerns over increase in harmful money lending in Derry

Derry’s Guildhall hosted an event to raise awareness around harmful money lending practices in the city.

The event was arranged by the Foyle Network Foundation in partnership with Apex Housing Association, Community Restorative Justice, Skeoge Community Hub, three city-based Credit Unions (Derry, Waterside, Pennyburn), and the PSNI.

The collective group wished to bring more awareness to the growing problem faced by many in the Maiden City.

Eamon McGinley, Outer West co-ordinator for Community Restorative Justice, said: “We were approached by Foyle Network Foundation last year, who were raising concerns about a number of people who had been approached or under pressure from illegal money lenders, so as part of that we came together with this partnership to try and provide pathways for people out of debt, especially in this type of debt where there is high interest, high risk, and high danger money lending.

“Our experience on the ground from listening to people who are engaging with the Foyle Network Foundation is that there are people who are getting involved with armed groups in the town who are then getting loans and can’t get out of that circumstance and are put at massive risk.

“From what we have been told, they have been asked to keep weaponry, keep drugs, and be involved in other illegal activities, or they are in a spiral of debt that they just can’t get out of, so through this partnership, what we are trying to do is give people information firstly, but also give people a pathway if they are in that circumstance so they can access reputable money lenders such as the credit union to break free from those chains of money lending.”

The cost of living crisis continues to impact many of the population following Covid, with this being one of the reasons people find themselves in this situation.

The Consumer Council shared that from a study they found that 31% of people surveyed were borrowing money to pay bills, the biggest common reason in this research.

They also shared that 34% of people surveyed in Northern Ireland are struggling with debt, with over half hiding it from their families.

Mr McGinley said: “The cost of living crisis, Covid, a lot of people are in a circumstance where they can’t go to the bank for a loan because there are affordability checks, for example, so if someone comes to your front door and offers you £2,000 and a payment back of £100 a week, if you are in the depths of poverty, you may take that risk, and once you take that risk, you are in that spiral.”

However, he did say that due to the pressures of today's society, there may be people getting themselves into debt and turning to these illegal forms of money lending to maintain appearances or buy gifts for loved ones at Christmas despite personal circumstances potentially changing.

The PSNI confirmed that while loaning money from these people is not illegal, it is the practice of lending money without a license that is illegal, as they wished to make victims aware they are willing to support them regarding this issue.

The collective group advised the crowd at the event that should they wish to borrow or loan money, to do it through the legal and licensed lenders, including the Credit Union.

Clare McLaughlin from the Credit Union said: “It is really important for all the Credit Unions and it is why we are working together and collaborating to put the message out there that we are aware of the harmful money lending that is going on in this city, and we want to say there are ethical, affordable lenders in the city, one of which is the Credit Union.

“From what we have been hearing, it seems the illegal money lenders are making it so easy as they are physically knocking on people's doors and asking them how much they want. Obviously, the Credit Union doesn’t do that, but what we want to highlight is the extortionate levels of interest that the illegal money lenders are charging, and then the repayment terms are so high it leaves people feeling threatened.

“If somebody has a loan with the Credit Union and gets into difficulty paying it back, we have a very supportive team to help that person manage to pay that back at a repayment that they can afford.”

This collective group is offering support to those who find themselves in a situation where they may be struggling with borrowing money; however, they cannot offer financial advice.

Should someone wish to receive financial advice, they must go to a regulated money advisor like Advice Northwest for this support.

Yet this group is seen as an important step in tackling the issue regarding harmful money lending in Derry, according to the deputy mayor of Derry City and Strabane District Council.

Councillor Darren Guy said: “I am delighted to have been invited to open today's event in raising awareness around harmful money lending practices that are having an extremely detrimental effect on those from single mothers to those with addictions, vulnerable adults, and families struggling because of the cost of living.

“Paramilitary crime gangs, loan sharks, and money lenders are taking advantage of those who are faced with their own struggles and turn to them as a last resort; these criminals are no friends of our community.

“In the recent advertising campaign by the Department for Justice against these crime gangs, I’ve seen buses, billboards, parks, and TV advertisements to push this issue to the forefront of our minds.

“Victims are faced with extortionately high interest rates, many being forced into crime to pay off their debts, including young victims being sexually exploited as a form of repayment.

“Through death threats either issued to themselves or family members as punishment for non-payment, victims have become too frightened to speak out, so it is through local community organisations like those gathered here today reaching out to suspected victims and continued operations by the PSNI to expose these criminal gangs that we will only then see a decrease in victims; sadly, though, we may never know the full extent of how this crime has affected those in our community.”