Thousands of homeowners are living in a state of fear because of intimidation from illegal moneylenders who are operating “unchallenged”, the St Vincent de Paul has warned.
Calling for action, Brendan Dempsey, the southern regional president of the SVP, maintains illegal moneylenders have “every second home” on the northside of Cork City in their grip.
“With so many people borrowing from these people, there has to be an awful lot of them operating around the country.
“It is not being dealt with. I remember ten years ago, in an area in Cork, a community meeting getting together with the guards and asking them to intervene,” Mr Dempsey said.
“They told the guards who was involved, and what was going on and gardaí said it would all be sorted within a year. Since then the problem has got much worse and it is trickling down to children who are seeing the effect this has had on their parents.
“I heard a story about a young boy coming home with a bullet in his hand, a sign to his parents from the moneylenders.”
Mr Dempsey said he had recently dealt with a woman who had initially borrowed €500, and had already paid back more than €1,500.
He said local gardaí did not seem to have the power or resources to deal with the issue and called on the Criminal Assets Bureau to investigate people who are making huge sums of money from the racketeering.
However, Michael Culloty of the Money Advice and Budgeting Service said gardaí have considerable powers to act under the Consumer Credit Act.
Under the act, gardaí may search and inspect any premises connected to suspected illegal money lending, and seize and retain any documents, monies or other suspected evidence.
The act also states where gardaí have “reasonable cause” to suspect someone has documents relating to illegal money lending they can, without warrant, stop and search if needs by force, the person and seize the document.
Mr Culloty said very few people who are involved with illegal moneylenders approach Mabs, but those who do are frightened and intimidated and once they are asked too many questions, they do not come back.
“I spoke to someone who had borrowed €500 to go to a funeral. The person didn’t know it was an illegal moneylender at the time. The lender came back after a few days saying he had to pay back €100 a week for ten weeks and if a week was missed there was a penalty of €100.”
As revealed in the Irish Examiner last week, the number of families turning to licensed legal moneylenders is soaring, with the biggest firm Provident now lending to 100,000 customers.
There are more than 40 licensed moneylenders operating across the country, and countless illegal agents, suggesting the numbers forced to borrow at exorbitant rates could be closer to 200,000.
Provident Personal Credit, which makes unsecured loans of up to €500, is the largest legal moneylender in Ireland.
For every €100 borrowed for one year, Provident charges €56. For six-month loans, the APR is 187.2%.
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