Britain’s Illegal Money Lending Teams (IMLT) will receive the cash injection to investigate and prosecute illegal lenders and to help victims who have been targeted by the unscrupulous criminals.
The team has already made over 380 prosecutions leading to 328 years’ worth of sentences since it was established in 2004.
It has also written off £73 million of illegal debt and helped over 28,000 people to escape the clutches of loan sharks.
Now the Government is increasing funding for the team by 16% more than last year. The cash will also be spent encouraging people in England at risk of being targeted by this kind of lending to join credit unions, which would provide access to safer forms of finance.
And, in Northern Ireland, a new education project would be developed to raise awareness of the dangers of loan sharks and support vulnerable communities.
John Glen, economic secretary to the Treasury, said: “These nasty lenders are nothing more than lowlife crooks taking hard-earned cash from the pockets of the most vulnerable.
“Over 300,000 people are in debt to illegal money lenders in Britain and they need to know that we’re on their side.
“That’s why we’re taking the fight to the loan sharks and spending more than ever to support their victims.”
StepChange Debt Charity said it welcomed the Government’s crackdown but warned the wider issue of legal high cost credit should not be forgotten either.
According to the charity, an estimated 1.4 million lower income households used high cost credit to meet day-to-day living costs last year. It urged the Government to support action on better alternatives to this as well as clamping down on loan sharks.
It also raised concerns credit unions were unlikely to have sufficient capacity or resources to meet the needs of victims.
Peter Tutton, head of policy at StepChange, said: “Cracking down on the unconscionable activities of loan sharks is a very welcome step.
“It needs to be accompanied by a twin-track focus on the high cost credit market more generally, to reduce the harm being experienced by vast numbers of households who are forced to borrow to make ends meet.
“Now is the time for the Government to explore creative, sustainable alternatives to meet the needs of financially vulnerable households.”