Agenda item - Illegal Money Lending Team Authorisation

This report informs Members of the work of Birmingham City Council’s specialist ‘Illegal Money Lending Team’ in tackling illegal lending and other associated crimes and seeks Member approval to authorise the team to investigate the activities of illegal money lenders and bring legal proceedings against them in the City of York.

Advice of the Advisory Panel

(i) That Option 1 be approved and it be agreed that the discharge of the Council’s functions of the enforcement of Part III of the Consumer Credit Act 1974 also be carried out in the City of York by Birmingham City Council (Pursuant to Section 101 of the Local Government Act 1972, Regulation 7 of the Local Authority (Arrangements for Discharge of Functions) (England) Regulations 2000 and Section 13 (7) of the Local Government Act 2000).

(ii) That the adoption of the “Protocol for Illegal Money Lending Team Investigations” be agreed and it be agreed that authority be delegated to the Head of Environmental Health and Trading Standards to enter into the agreement on behalf of City of York Council.

Decision of the Executive Member

RESOLVED: That the advice of the Advisory Panel be accepted and

endorsed.

REASONS: (i) To obtain a clear understanding of the scale and impact of illegal money lending as well as learning lessons on the best way to enforce.

(ii)To create a climate where victims can come forward – confident that prosecutions will be undertaken, and convictions obtained, without fear of reprisals.

Members considered a report, which advised them of the work of Birmingham City Council’s specialist ‘Illegal Money Lending Team’, and their work in tackling illegal lending and other associated crimes. The report sought Member approval to authorise the team to investigate the activities of illegal money-lenders and bring legal proceedings against them in the City of York.

The Head of Environmental Health and Trading Standards outlined the main details of the report and stated that there were a number of money lenders operating, who preyed on people with low incomes and who charged extortionate rates of interest. The Officer explained that York had been approached by Birmingham City Council, which had a specialist team and a very sophisticated process for tackling illegal money lending. Prosecutions would be undertaken by Birmingham and there would be no liability for costs to City of York Council, as this was Treasury funded until 2011, subject to review of government spending.

It was noted by Members that illegal money lending was a serious problem and one that was often below the radar; that those who borrowed could often least afford to do so and many were single mothers. It was noted by some Members that there was also concern about the extortionate rates of interest charged by legal money lenders and in addition through some higher purchase agreement arrangements. Officers explained that these higher rates charged by legal money-lenders could be looked at through the courts, but that often an individual had defaulted on previous loan repayments, hence the higher rates.

It was noted by Members that it was very important to focus advertising correctly to reach the right people. Officers confirmed that there would be a York and North Yorkshire launch of the service in February/March 2009 with the promotion of a helpline, which would be funded by Birmingham City Council. Officers confirmed that marketing of the service would be sectorised and that Consumer Credit Unions would be contacted. It was also noted that a two-way flow of information from the public in York to Birmingham and vice versa, would help to provide information about Credit Unions available locally, and that help and support, as well as information, would be made available.

Panel Members welcomed the initiative and the scheme was seen as sound and commendable.