MUM-OF-FIVE Annie Hawkins took a £200 loan from a stranger when she was strapped for cash.
But within weeks she owed four times that and was left living in fear after being threatened in her own home by a loan shark.
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The charity volunteer and cleaner, 45 who lives in Birmingham, turned to the unauthorised lender after she needed to replace her car tyres.
But just days after borrowing the money, she started receiving threatening texts to pay it back – and the “interest” on her debt had shot up to £800.
She told The Sun: “The car was our lifeline and I just had to get it fixed.
“The cheapest quote I could find for new tyres was £250.
“I wasn’t going to get paid for another three weeks, I had no savings so I scoured the house for the £40 I had stashed away for emergencies.”
Like thousands of others across the country, Annie found that she was unable to borrow cash via the usual routes like a bank or credit card.
That’s because Annie is in an IVA (individual voluntary arrangement), paying off previous debts.
Annie, who lives with her two youngest daughters aged 18 and 15, first turned to friends to borrow the cash, but found none could help.
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Then, one of her neighbours gave her a number to call where she could borrow money “no questions asked”.
“She told me she’d borrowed fifty quid and paid back £8. I was desperate,” Annie said.
“I knew if I didn’t get the car fixed, I couldn’t get to my cleaning job, run my daughter to school or get to the business course I’d signed up for.”
More than three million people have turned to loan sharks over the past three years, according to a report by non-profit body Fair4All Finance.
Like Annie, they are lured by a “friendly neighbour” into taking money from “the local lender” who then gets a £20 kickback for the introduction.
Bad decision
The neighbour took Annie to the local pub and introduced her to a tall, well-muscled man wearing a smart shirt and tie.
The man, who called himself George, handed her £200 in an envelope.
“He told me if I paid it back in two weeks the interest was £200 so I needed to come up with £400. It doubles every two weeks.”
“I knew I was making a bad decision, but I had no other solution.
“I asked if I needed to sign anything, and he laughed. I just had to write down my address and number and that was it.”
Annie’s relief at being able to fix her car soon turned to fear.
“He texted me every couple of days asking if I was ‘on track’ to make the repayment.
Annie managed to scrape together £340 by taking extra shifts and selling furniture on Facebook.
She took the cash to George and explained that she could get the remaining £60 to him in the next five days.
It was then the loan shark started threatening her.
“I remember the death stare he gave me, pointing his finger and leaning into my face menacingly, telling me he wasn’t a charity, and I knew his rules,” she said.
He said she owed £800 and needed to pay it back in two weeks.
If she didn’t, the amount would double again to £1,600 in another fortnight and then £3,200 after that – 16 times the original £200 she borrowed.
“He told me someone would be round every day to collect whatever cash I had. I was terrified,” Annie said.
“I was shaking and feared for myself and my kids.”
She felt she couldn’t go to the police or her bank because she had no paperwork showing she’d borrowed the cash.
Two days later the physical intimidation and abuse started.
Escalating threats
First there was knock at the door at 7am from a ‘collector’ and Annie was forced to give them whatever she had on her – £31 in notes and coins.
Then they cam every day, sometimes late at night or even earlier in the morning waking up the family at 4am.
“It was a relentless onslaught of banging on the door and texting and different people collecting whatever I had,” Annie said.
“One night I had nothing to give and the collector pushed into the hallway forcing me against the wall.
“He stamped his shoe on my foot and screamed I’d end up with nothing if I didn’t pay up.”
Annie was left bruised and shaken, and fled to a friends house with her daughters.
But the calls and harassment continued.
“When my neighbour called to say someone had been banging on my back door, I knew it was out of control,” Annie said.
“I feared not just for myself but my kids – I was paralysed by the daily pressure, the unrelenting fear, the panic I felt when I woke up. It was overwhelming.”
Annie stopped eating and answering the phone. It wasn’t until she confided in a friend what had happened that she was able to confront what was happening.
“I called a friend who was skint like me, but she listened and told me the same thing had happened to her,” she said.
“She told me to sell the car and clear the debt before something really bad happened. She came with me when I handed over the money afterwards.”
Three years on and Annie is still affected. Despite moving to a new town to make a fresh start.
“I still don’t sleep, i tell friends to text before they come around and never answer the door,” she said:
“I thought I was a tough mum, but loan sharks are vicious.
“They used terrorist tactics and intimate people to break them emotionally.
“They trade on desperation and use fear as a weapon.
“I am helping a local women’s group by answering phones and telling my story about my loan shark experience.
“I don’t want other mums to go through what I did.”
Alternatives to loan sharks
People who turn to loan sharks for money often feel like they’ve got no other option.
But Fair4All Finance boss Sacha Romanovitch is on a mission to change that.
She said: “If people need money to feed their children or pay their rent, there is help out there, from unclaimed grants through to support from credit unions and community finance.”
In the UK there are 400 not-for-profit Credit Unions and a small number of Community Development Finance Institutions.
You must be a member to borrow from a credit union and interest is capped at 42.6% a year.
CDFIs offer short-term loans of around £400 to £500 on average — as an alternative to high-cost payday lenders or illegal sharks.
They are typically more expensive than credit unions with rates up to 300%.
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For mum-of-three Sherifa McPherson, 36, from Lewisham, south London, money is always tight.
The part-time healthcare assistant earns between £1,200 and £1,400 a month for her hospital shifts but this sometimes doesn’t even cover her rent, which is nearly £1,400 a month.
She also receives a similar amount in Universal Credit but struggles to make ends meet.
Terrified of borrowing money from anyone in case she cannot pay it back, she did not know where to turn when she moved into an unfurnished property in January 2021.
When she was rejected for a credit card by her bank, a friend suggested she join her local credit union, Lewisham Plus.
Credit unions are a co-operative of individuals who pool their savings and use the money to give each other loans at a much lower interest rate than you’d typically get from a bank.
They also have the advantage that when you take a loan from a credit union you are automatically saving as you repay the loan.
Sherifa applied for £3,000 online in order to buy essentials including beds for her children, a fridge, washing machine and also school uniforms.
The next day the credit union came back to her offering £1,000.
She said: “Giving me less was the right thing to do. I paid back £50 a week and when I got it down to £440 by February a year later.
“Then I applied for another £2,100 from them after my mum got ill in Jamaica so I could fly back to see her.”
According to Lewisham Plus, Sherifa was charged annual interest at 26.8% at first – similar to a credit card.
But when the credit union gave her the additional loan, she was transferred to a lower rate of 19.6% APR as she’d kept to her previous repayment plan.
The lower interest rate meant Sherifa could pay back the loan more quickly and she has now paid off the loan entirely.
“It was a massive lifeline for me,” she said.
“The people at the credit union are very approachable. When I went to sign for my first loan, they also gave me some shoes for the children.
“With hindsight, I am glad I didn’t get that credit card and I don’t need it now that I have the credit union.”
