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Commercial moneylending is, with good reason, heavily regulated to ensure that unfair advantage is not taken of vulnerable borrowers. In one case that made that clear, two men who provided over £750,000 in finance to taxi drivers without any legal authority to do so received lengthy prison sentences.
The pair lent money to cabbies so that they could purchase new vehicles. The rates of interest that they charged were within normal commercial parameters and there was no evidence that they had engaged in so-called 'loan sharking' behaviour. However, their business was not authorised by the Financial Conduct Authority as it was required to be.
Both men said that they were unaware that they were breaking the law and would never have engaged in the enterprise had they known it was illegal. However, such ignorance was no defence and they pleaded guilty to running an unlawful lending business, converting criminal property and possession of criminal property. They were each jailed for two years and nine months.
The facts of the case emerged as the Court of Appeal reduced those sentences to two years. Several cabbies with whom the men dealt had testified that they had not been put under any pressure to repay loans and the Court noted that any profits that the pair had made would be confiscated under the Proceeds of Crime Act 2002.