Chancellor George Osborne has announced that enforcement teams cracking down on loan sharks could be funded by charging credit card companies and payday loans lenders with a fee.
The Illegal Money Lending Teams in England Wales will, as of April 2017, receive their funding from the introduction of a levy on credit companies.
The government has previously provided the funding for the teams, with more than 300 illegal money lenders being prosecuted by the teams since 2004, when the teams were formed. £50m of debt has also been written off as a result of the work done by the teams.
The government provided £3.6m for the running of the teams in 2015-16, amid reports the teams would face a funding cut, resulting in the workforce being reduced by a third. However, the Treasury said the funding of the team would be protected over 2016-17.
The power of introducing fees to consumer credit companies will be given to the Financial Conduct Authority (FCA), from 2017-18.
“I am absolutely determined to protect the customers from abuse and sharp practice in the consumer credit market,” said Mr Osborne.
“That is why I capped the total cost of a payday loan, it’s why we’re taking further action today to tackle illegal loan sharks by ensuring that enforcement teams have the funding, from the industry, that they need to protect customers from those that would do them harm.,” he continued.
