Illegal money lenders target needy

ILLEGAL money lenders are offering hard-pressed families in local authority housing estates cash loans of between €500 and €1,000 at interest rates of up to 200%.

The money lenders are taking clients’ children’s allowance books as collateral. Some are even escorted to their post offices on payment day for the money collection.

One company, which is registered and licensed to give loans, is also calling door-to-door in four key local authority housing estates in Waterford city, a local councillor says. It is charging a rate of 130% on loans.

Workers’ Party City Councillor John Halligan has complained to the Irish Financial Services Regulatory Authority, the body responsible for monitoring money lending. But it admitted yesterday there is little it can do.

Cllr Halligan now wants banks and credit unions to step in and offer low interest loans to stop people paying exorbitant interest rates.

“Money lending is a major problem and it has reached epidemic levels here in Waterford. Some of them are charging rates of 187%. RTÉ did an expose on the situation in Waterford over 10 years ago. The very same people are back around again.

“I was in an estate the night before last and saw two women driving around offering cash loans of up to €1,000. They were looking for €1,750 back.”

The Money Advice and Budgeting Services Board (MABS) said money lenders are targeting new housing estates in particular, knowing how the occupants are hard-pressed for cash after just moving in.

Anna Walsh, co-ordinator of Waterford MABS, said there’s a big price to be paid. Such lenders often start off offering curtains and household goods. They then proceed to offer cash loans.

“We need to see the gardaí being more active in housing estates, keeping an eye on what is going on,” she said.

The Irish Financial Services Regulatory Authority said clamping down on illegal money lenders is a matter for the gardaí. And while it has set a floor for lending rates, there is no set ceiling for anyone who wants to lend money if licensed to do so. “If people have any information about licensed money lenders acting outside of the law, then they should contact us or the gardaí,” a spokesperson said.

Calls to the Vincent de Paul society, meanwhile, have “gone through the roof” for the first few days of December, according to a spokesman. The society estimates it will help 20,000 families in the Dublin area alone through the Christmas period.

The society must revise its assistance budgets for the Christmas period in some areas by up to 25% because of the deluge of calls.