A warrant is produced and the sleep-befuddled man lets in the officers. They're investigators who specialise in the crime of illegal money lending - and they've had a tip-off that their target is a notorious loan shark.
The squad is carrying out similar raids once a week up and down the country. In the coming months, their workload is set to explode. Due to the credit crunch, mainstream lenders have withdrawn loans, tightened lending criteria and hiked interest charges. Now, as Britain heads deep into recession, only the most credit-worthy customers are welcome.
Those shut out are not just the unemployed or the very low-paid. Figures suggest that as many as ten million Britons no longer have access to High Street loans, so risk-averse have the banks and building societies become. But plenty of lenders are prepared to fill this void - and they are charging terrifying rates of interest.
Loan sharks, the name given to unlicensed money lenders, offer cash on extortionate terms. Borrow £300 and you face an annual percentage rate of charge (APR) between 8,000 and 12,00%. APRs of 150,000% are not unheard of. (In contrast, Barclaycard is offering a 'classic' credit card with an APR of 19.9%.)
But worse than the financial pain, the loan sharks routinely resort to intimidation and violence to ensure the 'terms' of their loans are met. Broken bones and sexual assaults are common, and such are the levels of intimidation that borrowers have even taken their own lives. Yet it is not just the illegal lenders who are set to benefit from the explosion in debt. Businesses offering no-questions-asked loans are springing up everywhere. There are those dependent on post-dated cheques linked to pay-days, those that take car logbooks as security, and an ever-growing army of doorstep lenders who turn up once a week to collect their payments. While licensed and legal, these lenders also offer shockingly high APRs - 400% plus is common.
There are even companies willing to 'help' those struggling with mortgage payments by buying houses and then renting them back. It sounds good in practice, but the reality is often very different. Instead of a home for life, the vendors find themselves homeless and in more debt than ever. Such is the threat posed by the illegal loan sharks that even the official charged with hunting them down is wary of revealing his full name.
'They really do make people's lives a misery,' says Tony, whose team of Trading Standards loan-shark busters is based in Birmingham and whose area of operation covers much of England. They like to see themselves as doing service to the community, but the reality is that they are the scourge of it. They drain and terrorise the community - illegal lenders enforce payment with the threat of violence or violence itself. They hit people with baseball bats or cut them with machetes.'
So why would anyone put themselves at such risk? First, they are often desperate and have nowhere else to turn. 'If you are on a low income and the washing machine packs up, that is a big expense,' explains Tony. 'People panic and often turn to friends for advice. He or she, trying to help, may suggest they get in touch with a loan shark. 'The friend may have borrowed from him before and if they have paid back their loan may think of him as an allright person. Loan sharks are everyone's best friend - as long as they get what they want.'
Me thinks if a man with a large fin on his back offers to lend you money beware, seriously though noone should seek terms from anyone who isn't representing a licensed and bonefide organisation and ALWAYS ask for an APR figure and total cost of borrowing amount before agreeing to anything.
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