0:00:02 > 0:00:05We all like to think we're getting a fair deal for our money,
0:00:05 > 0:00:07whether buying, selling or taking out a loan,
0:00:07 > 0:00:10and when times are hard it matters even more.
0:00:10 > 0:00:14But many of the deals on offer could cause you real problems.
0:00:14 > 0:00:16Some could even wreck your life.
0:00:22 > 0:00:24On today's programme.
0:00:24 > 0:00:28The ex-soldier whose deal with his bank left him over £100,000 in debt.
0:00:28 > 0:00:31- You got a pound coin on you?- No.
0:00:32 > 0:00:34- 50p?- No.- So you haven't got a penny on you?
0:00:36 > 0:00:38The woman who took on her bank and won.
0:00:38 > 0:00:41I've got a new nickname. It's Bankslayer!
0:00:41 > 0:00:45We head out with the UK's Illegal Money Lending team
0:00:45 > 0:00:48as they crack down on the worst deal in Britain, loan-sharking.
0:00:50 > 0:00:52And the victim who did a deal with a loan shark
0:00:52 > 0:00:55and paid the price for 19 years.
0:00:55 > 0:00:59I was laid up ill on the settee once and he started knocking into me.
0:00:59 > 0:01:03My mate come around and tried sticking up for me and he actually beat the living daylights
0:01:03 > 0:01:05out of my mate in front of my kids.
0:01:10 > 0:01:14Alan is 31 years old, homeless and penniless.
0:01:14 > 0:01:17He now stays at his brother's house, all because of
0:01:17 > 0:01:22the worst deal he ever made, with his bank, Northern Rock.
0:01:22 > 0:01:26Alan joined the army when he was 18 and served his country for 10 years.
0:01:28 > 0:01:31He was part of the peace-keeping force in Kosovo
0:01:31 > 0:01:33and also fought in Afghanistan.
0:01:33 > 0:01:37That's what I wanted to do, I wanted to fight for my country.
0:01:37 > 0:01:38That's why you join the Army.
0:01:38 > 0:01:42You sign your oath of allegiance, and that's a proud moment.
0:01:42 > 0:01:45Even though the Army was his childhood dream,
0:01:45 > 0:01:49for the sake of his marriage, Alan decided to leave.
0:01:49 > 0:01:51But it wasn't easy for him in civvy street.
0:01:52 > 0:01:56I struggled because when I decided to come out, the world just
0:01:56 > 0:01:59went into financial meltdown.
0:01:59 > 0:02:03As Alan tried to find a decent job, his marriage fell apart.
0:02:03 > 0:02:08When he became single, he was left with £20,000 worth of debts
0:02:08 > 0:02:13made up of a loan, credit cards and all the basics -
0:02:13 > 0:02:15phone, electricity and gas bills.
0:02:16 > 0:02:19The stress was starting to show.
0:02:19 > 0:02:24Stopped sleeping. It's almost like I'm allergic to sleep. You don't get a good night's sleep.
0:02:24 > 0:02:26You fall asleep a little bit,
0:02:26 > 0:02:32and something will trigger your brain, a bill or a phone call that you've had, or anything.
0:02:32 > 0:02:35And it stops you...
0:02:35 > 0:02:39it stops the way you normally are as a human being.
0:02:39 > 0:02:41The stress just takes over.
0:02:41 > 0:02:46In March 2011, the nightmare he dreaded actually happened.
0:02:46 > 0:02:49Northern Rock repossessed his home.
0:02:49 > 0:02:52When they resold the house at auction,
0:02:52 > 0:02:55all they got for it was £67,000.
0:02:55 > 0:02:59The shortfall against the mortgage was a massive £83,000.
0:03:00 > 0:03:04This was money they expected Alan to pay quickly.
0:03:04 > 0:03:05This was a terrible deal for Alan.
0:03:05 > 0:03:09The veteran's debts were then a whopping £102,000.
0:03:10 > 0:03:13It was almost too much to cope with.
0:03:13 > 0:03:18I carried on, just feeling more depressed and more depressed
0:03:18 > 0:03:26and then I got to the beginning of May and that's when I was - depending on your point of view -
0:03:26 > 0:03:29selfish, silly, foolish and reckless.
0:03:29 > 0:03:31That's when I tried to commit suicide.
0:03:33 > 0:03:37Former policeman Mike Thomas is a registered debt counsellor
0:03:37 > 0:03:39with 17 years experience.
0:03:39 > 0:03:44He runs a website giving free advice to people with money worries.
0:03:44 > 0:03:47He fights for the consumer rights of those who have taken up deals
0:03:47 > 0:03:48they now regret.
0:03:49 > 0:03:53Today, he's responding to an SOS call from Alan.
0:03:53 > 0:03:57It would appear that the debts are getting too big an issue.
0:03:57 > 0:04:00I've got to go in, find out what's going on, get to the bottom of it,
0:04:00 > 0:04:02and see if I can find a way forward.
0:04:02 > 0:04:06Today, Mike Thomas is meeting Alan for the first time.
0:04:07 > 0:04:13To start, Mike works out Alan's budget, and he's quite shocked.
0:04:13 > 0:04:15What do you spend on food?
0:04:15 > 0:04:17- About 30.- For the month? - I'm not kidding.
0:04:17 > 0:04:19Look in my cupboards.
0:04:19 > 0:04:23That's my fridge. They're not mine, they're my brother's. Been there since he was last here.
0:04:23 > 0:04:26I'm stunned. I've never seen anything like this.
0:04:26 > 0:04:32I can't believe a bloke at 30 years of age in this country is living on £30 a month and surviving, on food.
0:04:32 > 0:04:37Following such shocking evidence, Mike returns to Alan's budget.
0:04:37 > 0:04:41Alan currently has a job in a parking lot -
0:04:41 > 0:04:44but nearly everything he earns goes to pay off his debts.
0:04:44 > 0:04:48Mike thinks he could negotiate with the creditors to leave him more to live on.
0:04:48 > 0:04:51What if I said to you I could give you £50 a week?
0:04:51 > 0:04:56It would properly, properly change my life. It just would.
0:04:56 > 0:04:59As of this moment, no matter what solution we come to,
0:04:59 > 0:05:03you're going to have £50 a week to spend on food and toiletries.
0:05:03 > 0:05:07And there's no way a creditor or person that you owe money to
0:05:07 > 0:05:12is going to get away with making you live on £30 a month. That's going to stop as of now.
0:05:12 > 0:05:17Unfortunately, Mike's increased food budget has come too late to
0:05:17 > 0:05:20save Alan's best friend, Henry.
0:05:20 > 0:05:23I couldn't afford to feed him, so I had to let him go.
0:05:23 > 0:05:26I had to make a choice, it was horrible.
0:05:26 > 0:05:29He was the last thing that I lost,
0:05:29 > 0:05:35the last thing, he really was - the last thing that... It broke my heart.
0:05:35 > 0:05:40As the meeting continues, Mike learns more and more about Alan's lifestyle.
0:05:40 > 0:05:45If I asked you now to find some cash, how much could you put your hands on in a couple of minutes now?
0:05:45 > 0:05:48Nothing. There's nothing in the house.
0:05:48 > 0:05:53- Nothing. Never any...- Have you got a £1 coin on you?- No.- 50p?- No.
0:05:53 > 0:05:55So you haven't got a penny on you?
0:05:55 > 0:05:59Alan then explains to Mike the action that Northern Rock took.
0:05:59 > 0:06:03- This is the Northern Rock... - Yes, the outstanding Northern Rock.
0:06:03 > 0:06:06What do you think your house was worth?
0:06:06 > 0:06:12Someone said 112, then the property sold at auction, I think, for 67.
0:06:14 > 0:06:16£67,000?
0:06:16 > 0:06:20Someone's bought themselves an absolute bargain, at your expense.
0:06:20 > 0:06:24- When did they buy that?- It must have been around four weeks ago.
0:06:24 > 0:06:27And already Northern Rock are writing to you asking for methods of repayment.
0:06:27 > 0:06:29This is ridiculous.
0:06:29 > 0:06:33Alan says Northern Rock offered him no advice or sympathy
0:06:33 > 0:06:34and little time to pay.
0:06:34 > 0:06:36We asked Northern Rock to comment.
0:06:36 > 0:06:38They told us -
0:07:20 > 0:07:23You've got £96 a month left over, give or take,
0:07:23 > 0:07:26and that is to pay nearly £102,000.
0:07:26 > 0:07:30After checking all the facts and figures, Mike has come to
0:07:30 > 0:07:33the conclusion that there is only one sensible thing for Alan
0:07:33 > 0:07:37to do to escape the consequences of his mortgage deal.
0:07:37 > 0:07:40I've been with you now a number of hours
0:07:40 > 0:07:43and I can clearly see what a hell of a time you've been through.
0:07:43 > 0:07:47I see lots of people in my life, but you're in one of my top ten.
0:07:48 > 0:07:53I just cannot believe how you've managed to survive and do things.
0:07:53 > 0:07:56The option for you that is screaming is bankruptcy,
0:07:56 > 0:08:00and it is the only way forward.
0:08:00 > 0:08:04What it will do, it will ring fence all your other creditors,
0:08:04 > 0:08:09it will stop these people from telephoning you, taking court action,
0:08:09 > 0:08:11attachment of earnings.
0:08:11 > 0:08:13You will deal with one authority,
0:08:13 > 0:08:16which is the OR, Official Receivers Office, who are there to support you
0:08:16 > 0:08:20provided you'll be an honest bankrupt, which is what you are.
0:08:20 > 0:08:25You are an honest consumer bankrupt, I don't foresee any problems whatsoever.
0:08:25 > 0:08:28And it's designed, it's legislation to rebuild your life,
0:08:28 > 0:08:31because you're paying taxes, you're paying national insurance,
0:08:31 > 0:08:36you're contributing to society, but you're getting dragged down by this debt that you can't deal with.
0:08:36 > 0:08:38You've had triggers in your life.
0:08:38 > 0:08:40For goodness sake, you've had a separation, you took a pay cut when
0:08:40 > 0:08:44you came out the Army, it made you ill, it made you very unwell, you've
0:08:44 > 0:08:48lost an awful lot of things, it's about time you started to rebuild.
0:08:48 > 0:08:54But we've got a problem, how are you going to get the bankruptcy fees?
0:08:54 > 0:08:58Going bankrupt costs £700 in fees, which Alan simply couldn't afford.
0:08:58 > 0:09:03But Mike believes he can get an Army welfare organisation to meet those costs.
0:09:03 > 0:09:07If he can, bankruptcy could come very quickly.
0:09:07 > 0:09:11What if I said to you that if I can get these fees paid for you,
0:09:11 > 0:09:15you could go bankrupt in the next three, four weeks,
0:09:15 > 0:09:16and put an end to it all.
0:09:16 > 0:09:19That's like a winning lottery ticket.
0:09:19 > 0:09:24As the day ends, Mike leaves Alan to think about what he's been told.
0:09:24 > 0:09:28This means more to me than I could simply put into words.
0:09:28 > 0:09:34Every day it's always on my mind, every day I'm expecting someone to knock on my door.
0:09:34 > 0:09:40Every day I'm expecting phone calls, every day I'm worrying how I'm going to make ends meet.
0:09:40 > 0:09:43Every single day this is always on my mind.
0:09:44 > 0:09:48Later, we'll see if Alan can end his mortgage nightmare.
0:09:54 > 0:09:58But first, with people living on less, unsure of their jobs,
0:09:58 > 0:10:01and their credit ratings pushed to the limit,
0:10:01 > 0:10:04more of us are relying on stores that offer less stringent
0:10:04 > 0:10:07credit checks and pay-weekly terms to buy household essentials.
0:10:08 > 0:10:11But do these deals represent good value?
0:10:12 > 0:10:16We've had a look at the deals from the UK's three most successful
0:10:16 > 0:10:17pay-weekly stores.
0:10:17 > 0:10:21Since the recession, business has been booming.
0:10:21 > 0:10:23These stores allow people to buy items like cookers,
0:10:23 > 0:10:27fridges and sofas, by paying in weekly instalments.
0:10:28 > 0:10:31'At BrightHouse you can pay weekly for the things you need.'
0:10:31 > 0:10:33'You'll want somewhere with
0:10:33 > 0:10:36'the lowest weekly payments on the biggest brands.'
0:10:36 > 0:10:40'There's something for everyone at Buy As You View.'
0:10:40 > 0:10:44Sally doesn't want us to identify her, so it's not her real name.
0:10:45 > 0:10:47She lives with her four children,
0:10:47 > 0:10:49so when she needed a new cooker,
0:10:49 > 0:10:52it was an essential she couldn't do without.
0:10:52 > 0:10:55Unable to work, she thought pay-weekly was the most sensible option,
0:10:55 > 0:10:59and visited her local Perfect Home store.
0:10:59 > 0:11:01I went to Perfect Home to get the cooker
0:11:01 > 0:11:06because they don't do credit checks, you have to give three references.
0:11:06 > 0:11:09But, as simple as it was to buy the cooker,
0:11:09 > 0:11:12the actual cost was a little more confusing.
0:11:12 > 0:11:17She signed an agreement for a cooker which cost £927.99.
0:11:17 > 0:11:23On top of that were three years of interest, totalling £404.25.
0:11:23 > 0:11:28She was also sold maintenance vouchers costing £647.61,
0:11:28 > 0:11:34with interest payable on those over three years of £280.59.
0:11:36 > 0:11:40She was also to pay £3.09 per week for insurance.
0:11:40 > 0:11:44That totalled £482.04.
0:11:44 > 0:11:49And finally, she paid £105 to have the cooker installed.
0:11:49 > 0:11:56So her £900 cooker was going to cost her £2,847.48.
0:11:56 > 0:12:00Sally was to pay £17.58 a week.
0:12:00 > 0:12:03To be quite honest, I went in with my eyes closed, to be fair.
0:12:03 > 0:12:08Although the cooker would cost her over £2,800, because she was
0:12:08 > 0:12:14only paying £17.58 a week, Sally thought it was affordable.
0:12:14 > 0:12:17The same cooker was recently on sale in several leading high street stores
0:12:17 > 0:12:19for under £700.
0:12:19 > 0:12:25Damon Gibbons is the director of the Centre for Responsible Credit
0:12:25 > 0:12:29and he thinks these types of deals are very bad news for people like Sally.
0:12:29 > 0:12:33Our biggest concern about this sector of the credit industry is the cost.
0:12:33 > 0:12:37The fact that they are targeted to people on low incomes and for whom
0:12:37 > 0:12:41many people will have had problems repaying credit in past.
0:12:41 > 0:12:44Once you've added in some of the optional service covers
0:12:44 > 0:12:47and insurances it's a huge amount to pay.
0:12:47 > 0:12:52It really is a problem of the poor paying the most for essential items
0:12:52 > 0:12:56which anybody really needs in their home in today's day and age.
0:12:58 > 0:13:00Damon's been investigating
0:13:00 > 0:13:03whether the deal Sally got was typical or unusual.
0:13:03 > 0:13:07On the same day in the Midlands, he visited BrightHouse and Perfect Home,
0:13:07 > 0:13:11and spoke to a salesman about what deal he could expect on a typical
0:13:11 > 0:13:14home necessity, a fridge freezer, one that was stocked at each store.
0:13:15 > 0:13:18He also checked out the same fridge freezer on Buy As You View -
0:13:18 > 0:13:22who don't operate on the high street, so he went onto their website.
0:13:22 > 0:13:27The mid-range fridge freezer we chose was widely available
0:13:27 > 0:13:30in other stores for around £600.
0:13:30 > 0:13:33So I'm on the Buy As You View website,
0:13:33 > 0:13:34and I've found the fridge freezer.
0:13:34 > 0:13:38It gives the headline price, the cash price of the item,
0:13:38 > 0:13:40and then it gives the weekly rate.
0:13:42 > 0:13:49Doesn't really talk about any additional covers, or insurances which might be required.
0:13:49 > 0:13:52Damon couldn't actually find all the information
0:13:52 > 0:13:56he wanted on their website so we rang them direct to get the details.
0:13:56 > 0:13:59'There's something for everyone at Buy As You View.'
0:14:00 > 0:14:04The Buy As You View deal works out like this -
0:14:04 > 0:14:08the fridge freezer costs £799.99.
0:14:08 > 0:14:12The interest would be £589.87.
0:14:12 > 0:14:16A total of £1,389.96.
0:14:16 > 0:14:18But if the optional maintenance
0:14:18 > 0:14:20and insurance is taken,
0:14:20 > 0:14:23the new total is £1684.80
0:14:25 > 0:14:28Then Damon visited BrightHouse.
0:14:28 > 0:14:31I think BrightHouse were fairly up front with regards to pricing,
0:14:31 > 0:14:37and the way that was composed of the cash price of the goods,
0:14:37 > 0:14:41the optional service cover, and damage liability cover.
0:14:41 > 0:14:43But Damon had a problem finding out
0:14:43 > 0:14:46the full details of the deal in the store.
0:14:46 > 0:14:49We were asking for a copy of the terms and conditions to
0:14:49 > 0:14:53be given to us, and there was a real reluctance to do that.
0:14:53 > 0:14:55We both love our weekly payment store!
0:14:57 > 0:15:00The BrightHouse deal works out like this -
0:15:00 > 0:15:03the fridge freezer costs £724.97.
0:15:03 > 0:15:07The interest would be £318.67.
0:15:07 > 0:15:10A total of £1,043.64.
0:15:10 > 0:15:12But if the optional maintenance
0:15:12 > 0:15:15and insurance is taken,
0:15:15 > 0:15:19the new total is £1,845.48.
0:15:19 > 0:15:21Next up, Perfect Home.
0:15:21 > 0:15:24I think with Perfect Homes it was difficult to get
0:15:24 > 0:15:29the information that most consumers would want from a salesperson.
0:15:29 > 0:15:38There were some missing key bits of financial information on the actual fridge freezer itself.
0:15:38 > 0:15:42So, for example, it didn't tell you about the insurance aspects of it,
0:15:42 > 0:15:47and it was a bit vague when it came to exactly how much money that was going to cost.
0:15:47 > 0:15:50'If you want the perfect home, then come to Perfect Home.'
0:15:50 > 0:15:54The Perfect Home deal works out like this -
0:15:54 > 0:15:58the fridge freezer costs £799.99.
0:15:58 > 0:16:02Total interest would £295.13.
0:16:02 > 0:16:06A total of £1,095.12.
0:16:06 > 0:16:09But if the optional maintenance and insurance is taken,
0:16:09 > 0:16:13the new total is £2,168.40.
0:16:13 > 0:16:15So the worst deal on that fridge freezer,
0:16:15 > 0:16:19that you could buy elsewhere for £600,
0:16:19 > 0:16:23was Perfect Home at £2,168.40,
0:16:23 > 0:16:26if you include optional maintenance and insurance.
0:16:26 > 0:16:31Even beyond the issue of price alone, there's a question mark here
0:16:31 > 0:16:33around the terms and conditions, the transparency
0:16:33 > 0:16:35how these things are sold to people,
0:16:35 > 0:16:41and whether or not they're really in a position to exercise choice.
0:16:41 > 0:16:43We asked the companies to comment.
0:16:43 > 0:16:48Buy As You View told us -
0:17:10 > 0:17:13BrightHouse made this statement -
0:17:45 > 0:17:47Perfect Home did not respond.
0:17:50 > 0:17:54If you've got money troubles, then the type of deal you do with
0:17:54 > 0:17:59your creditors is critical. Get it wrong and you could lose your home.
0:17:59 > 0:18:03Mandy Farmer is on the brink of becoming one of the 100 people
0:18:03 > 0:18:05every day who have their homes repossessed.
0:18:06 > 0:18:10Mandy had worked for many years with no money worries.
0:18:10 > 0:18:13When her father died, she moved in with her mother to
0:18:13 > 0:18:15the old family home.
0:18:15 > 0:18:18I've lived with my mum because once my dad passed away she didn't want
0:18:18 > 0:18:22to be on her own. It's been the family home for 55 years.
0:18:22 > 0:18:25I've lived here,
0:18:25 > 0:18:29I've been brought up here, I've grown up here, all the memories are here.
0:18:29 > 0:18:34Back in 2008, Mandy made what would become a disastrous deal.
0:18:34 > 0:18:38She consolidated her unsecured debts with her mother's,
0:18:38 > 0:18:40and secured them against the family home.
0:18:40 > 0:18:43I was finding it was costing me
0:18:43 > 0:18:47more to pay it all separately than it was to get it all paid
0:18:47 > 0:18:53in the one payment, and it was easier each month to do it that way.
0:18:53 > 0:18:57Mandy had a regular salary, so there were no problems with repayments.
0:18:57 > 0:19:02But in 2009, her mum had devastating news.
0:19:02 > 0:19:07About a year ago, year-and-a-half ago, she was diagnosed with Alzheimer's.
0:19:07 > 0:19:11I had to wash her, I had to clean her, had to feed her. If we went out,
0:19:11 > 0:19:15she had to be put in a wheelchair, I was literally doing everything.
0:19:15 > 0:19:19I then had to give up my full-time job
0:19:19 > 0:19:22because she needed 24-hour care.
0:19:23 > 0:19:25So, with her mum dependent on her at every turn,
0:19:25 > 0:19:30and now with no income, Mandy had no choice but to claim benefits.
0:19:30 > 0:19:34She called the finance company who had given her the loan straight away.
0:19:34 > 0:19:38I explained the situation and that I would only be receiving
0:19:38 > 0:19:41Carer's Allowance until whenever,
0:19:41 > 0:19:44and sort of tried to make an agreement with them
0:19:44 > 0:19:46and sort a form of payment out.
0:19:46 > 0:19:49But the finance company was adamant.
0:19:49 > 0:19:52They wanted the full amount due to be paid every month
0:19:52 > 0:19:55and they wouldn't renegotiate a smaller amount
0:19:55 > 0:19:57while Mandy was in difficulties.
0:19:57 > 0:19:59Once they said to me they needed
0:19:59 > 0:20:02the full amount, I just couldn't afford it.
0:20:02 > 0:20:03Being on Carer's Allowance,
0:20:03 > 0:20:07it was more than what I was getting for Carer's Allowance.
0:20:07 > 0:20:11There wasn't a lot I could do, just panic, basically,
0:20:11 > 0:20:14because I knew I was going to get this debt.
0:20:15 > 0:20:19For the next 12 months, Mandy gave her mum the best care she could,
0:20:19 > 0:20:21until one day she was admitted to hospital.
0:20:21 > 0:20:27I went in to see her, I walked into the ward, and said hello,
0:20:27 > 0:20:34gave her a kiss, turned away, turned back, and that was it, she was gone.
0:20:34 > 0:20:37So within five minutes, if I was five minutes late, she'd have been gone.
0:20:40 > 0:20:45Mandy contacted the finance company to let them know of her mum's death.
0:20:45 > 0:20:48She told them she was no longer entitled to Carer's Allowance.
0:20:48 > 0:20:52In short, she was living on even less money.
0:20:52 > 0:20:54My mum passed away end of April.
0:20:55 > 0:20:59The first letter I got was about the end of May, beginning of June,
0:20:59 > 0:21:05to say they'd be going to court and taking possession of the house.
0:21:05 > 0:21:08Mandy had found herself in the same awful position
0:21:08 > 0:21:11as tens of thousands of other people.
0:21:11 > 0:21:14Due to circumstances beyond her control,
0:21:14 > 0:21:17she was unable to repay a loan that was secured on her home.
0:21:18 > 0:21:22That deal meant she now risked repossession of the property
0:21:22 > 0:21:25that had been in her family for 55 years.
0:21:25 > 0:21:27The house where she grew up.
0:21:27 > 0:21:30I think I just burst out crying.
0:21:30 > 0:21:33That day, as soon as I read the letter, I thought, that's it,
0:21:33 > 0:21:34I've failed, I've lost the house.
0:21:34 > 0:21:38I was sort of still grieving for my mum.
0:21:38 > 0:21:40I just collapsed in tears.
0:21:40 > 0:21:44Later, we'll find out if Mandy can save the family home.
0:21:47 > 0:21:52It's an early morning start in Hull for the Illegal Money Lending Team.
0:21:52 > 0:21:57They target the loan sharks who prey on people with poor credit histories.
0:21:57 > 0:22:01A deal with a loan shark is the worst deal imaginable.
0:22:01 > 0:22:04Today, with local police, they have a warrant to search
0:22:04 > 0:22:09the home of Lee Bates, a man they suspect of illegal money lending.
0:22:10 > 0:22:14The officers knock on the door. There's no answer.
0:22:14 > 0:22:16The team are ready to force entry.
0:22:17 > 0:22:21Then one of the officers spots Lee Bates in an upstairs window.
0:22:21 > 0:22:23Open the door!
0:22:23 > 0:22:26Just as the police prepare to make their way into the property,
0:22:26 > 0:22:29someone answers the door.
0:22:29 > 0:22:32Once inside, the search begins.
0:22:32 > 0:22:34DOG BARKS
0:22:34 > 0:22:38Tony Quigley is the head of the national Illegal Money Lending Team.
0:22:38 > 0:22:41What he wants is evidence of the loan shark's victims -
0:22:41 > 0:22:44perhaps a loan book listing people who have borrowed money,
0:22:44 > 0:22:47computer records, or cash.
0:22:47 > 0:22:53His team deal with the victims of loan sharks on a regular basis
0:22:53 > 0:22:56and some of their stories are harrowing.
0:22:56 > 0:22:59Mike, which is not his real name,
0:22:59 > 0:23:03says borrowing from a loan shark was his worst deal.
0:23:03 > 0:23:07He wants to remain anonymous because he still fears for his safety.
0:23:07 > 0:23:12He paid a loan shark for 19 years and suffered intimidation and violence.
0:23:12 > 0:23:16It all started with a £300 loan to buy a car from
0:23:16 > 0:23:21someone he thought was being helpful - a deal he would live to regret.
0:23:21 > 0:23:25When I couldn't pay him, he increased what I owed him.
0:23:25 > 0:23:30Then he'd increase the payments and it just got right out of control.
0:23:30 > 0:23:36He never once told us what interest he was going to put on, never told us how much we owe him.
0:23:36 > 0:23:40If we ever asked it was just, "Oh, you owe me a lot."
0:23:40 > 0:23:44I was laid up ill on the settee once, and he just started knocking into me.
0:23:44 > 0:23:49Me mate came around and tried sticking up for me, and he beat the living daylights out of my mate,
0:23:49 > 0:23:50in front of my kids.
0:23:50 > 0:23:53And so...
0:23:53 > 0:23:56We just continuously paid, because of the intimidation.
0:23:56 > 0:24:00He was the very first thing that we made sure we paid, week in, week out.
0:24:00 > 0:24:07Weren't bothered about rent, water, food, gas, electric, weren't bothered about none of that,
0:24:07 > 0:24:09as long as he was paid first.
0:24:11 > 0:24:16Because if we didn't pay him, I was liable to get another hiding.
0:24:16 > 0:24:18When he couldn't meet the payments,
0:24:18 > 0:24:21Mike often borrowed more money from the loan shark to pay back
0:24:21 > 0:24:26the original loan, and it had a devastating effect on him and his family.
0:24:27 > 0:24:32It affected me relationship with me wife, at times we split up.
0:24:32 > 0:24:36I ended up with depression, I lost me job because of depression.
0:24:38 > 0:24:42I tried to commit suicide, the police picked me up one day, well, one night.
0:24:42 > 0:24:46I had a rope in the back of the car, was going to hang myself, they stopped me.
0:24:46 > 0:24:49I had a heart attack because of the stress.
0:24:49 > 0:24:55I collapsed at work, because I was so ill and should have taken time off, but daren't because obviously
0:24:55 > 0:24:57I wanted to keep on paying him.
0:24:57 > 0:25:01Mike estimates that across those 19 years,
0:25:01 > 0:25:04he actually borrowed about £2,500.
0:25:04 > 0:25:09But what he paid to the loan shark was an awful lot more.
0:25:09 > 0:25:11In excess of 90,000.
0:25:13 > 0:25:16That is a rough guess.
0:25:16 > 0:25:19The early morning raid by the Illegal Money Lending Team
0:25:19 > 0:25:23on the home of suspected loan shark Lee Bates continues.
0:25:23 > 0:25:27Head of the team, Tony Quigley, is waiting to see
0:25:27 > 0:25:31if his officers have found evidence to warrant an arrest.
0:25:31 > 0:25:35Officers are in the property at the moment, examining paperwork and bits and pieces,
0:25:35 > 0:25:39to see whether or not there's any evidence to be seized,
0:25:39 > 0:25:44and then we'll have a decision on whether or not there's sufficient to effect an arrest.
0:25:44 > 0:25:47The search has taken most of the morning.
0:25:47 > 0:25:51The officers cannot afford to leave anything to chance,
0:25:51 > 0:25:54and work to ensure nothing is missed.
0:25:54 > 0:26:00Search every room, and inspect all the documentation,
0:26:00 > 0:26:03and we believe that we have found some material
0:26:03 > 0:26:05that is worth seizing.
0:26:05 > 0:26:08And there's some cash as well that will be taken.
0:26:10 > 0:26:12Finally, with the search at an end,
0:26:12 > 0:26:15the team believe they have enough evidence for an arrest.
0:26:15 > 0:26:18I am arresting you on suspicion of illegal money lending,
0:26:18 > 0:26:24collecting, also money laundering between October 2010 to present day.
0:26:24 > 0:26:26You do not have to say anything...
0:26:31 > 0:26:35The Illegal Money Lending Team are carrying out raids like this
0:26:35 > 0:26:37continually across the country.
0:26:37 > 0:26:41The next step in this case is to discover who else may be involved
0:26:41 > 0:26:44and who may be a victim.
0:26:44 > 0:26:49One of the key things is that we move as quickly as we can now
0:26:49 > 0:26:55to establish who's involved and what size the operation is.
0:26:55 > 0:27:00And it's quite clear, really, that we need to identify people who may have
0:27:00 > 0:27:02had loans from this particular person.
0:27:04 > 0:27:06Lee Bates was subsequently charged
0:27:06 > 0:27:08and convicted of two counts of illegal money lending.
0:27:08 > 0:27:14He received a two-year community order plus 180 hours of unpaid work.
0:27:14 > 0:27:18Mike, who was a victim of a different loan shark,
0:27:18 > 0:27:21eventually contacted the Illegal Money Lending Team
0:27:21 > 0:27:24after reading about another of their successful operations.
0:27:24 > 0:27:29I see a bit in the newspaper about another loan shark being caught
0:27:29 > 0:27:35and there was a contact e-mail on there, so I contacted the loan shark team.
0:27:35 > 0:27:38The loan shark texted me the following day saying it was pay day.
0:27:38 > 0:27:45I arranged to meet him, and he turned around and said, "If the money's not paid then I'll go after your wife."
0:27:45 > 0:27:49That was the final straw. I then contacted the loan shark team again,
0:27:49 > 0:27:51sat down and spoke with one member of them.
0:27:51 > 0:27:57He was absolutely fantastic, everything he promised and assured me, he delivered.
0:27:57 > 0:28:01Mike's loan shark was prosecuted, pleaded guilty
0:28:01 > 0:28:03and received a prison sentence.
0:28:03 > 0:28:08When I heard he'd been sent down, I mean, I'm a man, I don't admit to nearly crying,
0:28:08 > 0:28:11and I did, I nearly cried.
0:28:11 > 0:28:13Just with relief.
0:28:14 > 0:28:18Mike's case is just one of many that the Illegal Money Lending Team
0:28:18 > 0:28:20deal with all the time.
0:28:20 > 0:28:24The stories, though tragic, are often so similar.
0:28:24 > 0:28:29With most of these illegal lenders, they come across as your best friend.
0:28:29 > 0:28:32It's all about trapping you into that spiral of debt.
0:28:32 > 0:28:37You know, if they were nasty to you from the start, you would stay away from them.
0:28:37 > 0:28:40But they appear to be the knight in shining armour.
0:28:40 > 0:28:46You're in financial difficulties and they come through the door and everything they can help you with.
0:28:46 > 0:28:52That's how they respond, and it is that relationship, you know, we're best buddies.
0:28:52 > 0:28:55Yeah, I'll give you the money, and I'll give you that instant decision.
0:28:55 > 0:29:00But it's when you find you have further difficulties, when you see the real side of them.
0:29:00 > 0:29:06It's made a massive difference. Me and me wife, we get on so well now, we don't argue,
0:29:06 > 0:29:09because there's no money issues.
0:29:09 > 0:29:12Before we wouldn't have dreamt of going to Blackpool, or going to Dorset,
0:29:12 > 0:29:15but in April, we're going to Blackpool.
0:29:15 > 0:29:19In September-time, hopefully, we're going to be going down to Dorset, if I can get time off work.
0:29:19 > 0:29:21It's just so much difference.
0:29:26 > 0:29:30The small market town of Royal Wootton Bassett in Wiltshire
0:29:30 > 0:29:33is the home of an unlikely heroine.
0:29:33 > 0:29:37Josie Lewis's worst deal brought her to the brink of a financial disaster.
0:29:37 > 0:29:42But it wasn't with a back street lender, or an online loan company.
0:29:42 > 0:29:46Instead, she took on her bank, the mighty HSBC.
0:29:47 > 0:29:50It was all about these, her bank charges.
0:29:50 > 0:29:56None of us like them, but for Josie they led to an extraordinary confrontation at the bank.
0:29:56 > 0:29:59I've always been on a low wage so money has been tight.
0:29:59 > 0:30:04Once I start getting into financial difficulties, it is difficult to get out.
0:30:04 > 0:30:08When she did not have enough funds to cover direct debits,
0:30:08 > 0:30:10she incurred bank charges.
0:30:10 > 0:30:15She got into a cycle of missing more payments and getting more charges.
0:30:15 > 0:30:17It reached a point where the bank was taking nearly
0:30:17 > 0:30:19a third of my salary in bank charges,
0:30:19 > 0:30:21which then means there are insufficient funds
0:30:21 > 0:30:25to pay your mortgage, Council Tax and essential bills.
0:30:25 > 0:30:28The deal then got even worse.
0:30:28 > 0:30:32Josie had to have an overdraft of £1,000 to help cover
0:30:32 > 0:30:36some of the outstanding bank charges on her account.
0:30:36 > 0:30:41One day, she was surprised to hear from the bank that they wanted
0:30:41 > 0:30:44all the outstanding charges paid off immediately.
0:30:44 > 0:30:47She simply couldn't afford it. She was unable to pay.
0:30:49 > 0:30:52Far from helping its customer with their finances,
0:30:52 > 0:30:56the bank itself had become the problem.
0:30:56 > 0:31:03I had 2,440 in bank charges. That kept my account in the red by 2,100.
0:31:03 > 0:31:07Worried the bank would use her wages to pay off all the outstanding charges,
0:31:07 > 0:31:09and leave her with nothing,
0:31:09 > 0:31:14Josie felt forced to open a bank account elsewhere.
0:31:14 > 0:31:17She then asked HSBC to put the account on hold.
0:31:17 > 0:31:20I wrote to the bank saying, "You will freeze my account.
0:31:20 > 0:31:23"It is not to be used. There are no standing orders to go out.
0:31:23 > 0:31:27"There are no transactions whatsoever to be going out."
0:31:27 > 0:31:29That didn't work. The bank just ignored it.
0:31:29 > 0:31:33HSBC continued to draw money from the account,
0:31:33 > 0:31:35putting charges on top of charges.
0:31:35 > 0:31:40- Josie was desperate for help. - I wrote to the ombudsman.
0:31:40 > 0:31:45He found in my favour. It took ages. It took several months, but he found that bank charges were causing
0:31:45 > 0:31:49financial hardship and the bank must deal with these sympathetically.
0:31:49 > 0:31:51As a result of her complaint,
0:31:51 > 0:31:56the bank offered her £440 to help cover two months' worth of bills.
0:31:56 > 0:31:59But that was by no means the end of the matter.
0:31:59 > 0:32:02It seemed to Josie that the bank then became
0:32:02 > 0:32:06more relentless in pursuing the outstanding charges.
0:32:06 > 0:32:08I kept getting hundreds of phone calls,
0:32:08 > 0:32:10some of which were threatening.
0:32:10 > 0:32:15'Saying to me, "Miss Lewis, you owe was money. When are you going to pay us?
0:32:15 > 0:32:18'"These calls won't stop unless you pay us the money."'
0:32:18 > 0:32:22It would be on your mind all the time and I can see how people
0:32:22 > 0:32:27get suicidal when they've got debts and when someone is chasing them for money.
0:32:27 > 0:32:30Josie decided that things had come to a head
0:32:30 > 0:32:32and she needed to speak to the bank manager.
0:32:32 > 0:32:35Mr Hicks said, "OK, we'll go into the interview room
0:32:35 > 0:32:37"and we'll discuss the bank charges."
0:32:38 > 0:32:40When we went into the interview room,
0:32:40 > 0:32:43he made a big point of locking the door.
0:32:43 > 0:32:47He was making it very purposeful, locking the door.
0:32:47 > 0:32:50He was making a point of it. That is what I found scary.
0:32:51 > 0:32:53He sat down and said,
0:32:53 > 0:32:56"We'll go through a financial review for you."
0:32:56 > 0:33:00Then he said, "I'm sorry, Miss Lewis. I can't stop these charges."
0:33:00 > 0:33:03Josie felt that if he could not do anything about the charges,
0:33:03 > 0:33:06the interview was pointless and got up to leave.
0:33:06 > 0:33:11Again, he's across the door like this. "No, no, Miss Lewis, it's all right."
0:33:11 > 0:33:13By this time, I'm asking to be let out.
0:33:13 > 0:33:17The girls have heard all the commotion and they have come through
0:33:17 > 0:33:20from the rear door of the interview room to see what is going on.
0:33:20 > 0:33:23They could see I was scared. They could see I was in tears.
0:33:23 > 0:33:26They could see I was frightened, but I don't think
0:33:26 > 0:33:29they had been trained to deal with a situation like that.
0:33:29 > 0:33:32The next day, Josie lodged a complaint with the bank.
0:33:33 > 0:33:37But the investigation was led by Mr Chris Hicks -
0:33:37 > 0:33:40the very man who had locked her in his office.
0:33:40 > 0:33:43As she battled to sort out her finances,
0:33:43 > 0:33:47with no help from her bank, Josie looked for a way out.
0:33:47 > 0:33:52It was affecting my working life, my concentration, my sleep and all
0:33:52 > 0:33:56my time was being taken up writing to the bank, dealing with the bank.
0:33:56 > 0:34:01I put all my debts with the debt management agency,
0:34:01 > 0:34:05that means that the bank and any creditors cannot harass you for money.
0:34:05 > 0:34:08They have to deal with the debt management agency.
0:34:08 > 0:34:12Whale Josie thought this would be a solution, the bank obviously didn't.
0:34:12 > 0:34:15They continued to harass her.
0:34:15 > 0:34:18The calls continued. I was getting nowhere with the bank.
0:34:18 > 0:34:23I was getting very distressed, having sleepless nights.
0:34:23 > 0:34:25The only option was to take the bank to court.
0:34:25 > 0:34:29But she didn't have enough money to pay a solicitor for the hearing,
0:34:29 > 0:34:30so she represented herself.
0:34:31 > 0:34:34I won my case. I won it on three counts.
0:34:34 > 0:34:38The judge found that the bank had failed in its care and professional
0:34:38 > 0:34:39skill in handling my account.
0:34:39 > 0:34:44She found that the bank was guilty of harassment with phone calls, which were threatening.
0:34:44 > 0:34:47She also found that the bank manager was guilty of false imprisonment
0:34:47 > 0:34:52and that he had caused intimidation and distress during that interview.
0:34:52 > 0:34:58After months of fighting with HSBC, they eventually apologised to Josie.
0:34:58 > 0:35:01The judge ordered that the bank discharge
0:35:01 > 0:35:03over £2,000 worth of charges.
0:35:03 > 0:35:08I'm really pleased and lots of other people have since said to me
0:35:08 > 0:35:12what a brilliant job I had done.
0:35:12 > 0:35:15I had had the strength to see it through.
0:35:15 > 0:35:18I've got a new nickname. It's Bankslayer.
0:35:23 > 0:35:27Mandy Farmer's worst deal was with a finance company that said
0:35:27 > 0:35:32they would consolidate her loans and secure them against her property.
0:35:32 > 0:35:35It's a deal that has left her on the brink of losing her home.
0:35:35 > 0:35:38Mandy was about to get some help.
0:35:38 > 0:35:42She lives in Basingstoke and the local authority
0:35:42 > 0:35:46had been startled by the high number of repossessions in the area.
0:35:46 > 0:35:50The council employed Mark Fisher, an expert debt adviser.
0:35:50 > 0:35:51His mission was simple.
0:35:51 > 0:35:55To stop Basingstoke's properties from falling into the control
0:35:55 > 0:35:58of the banks and finance companies and keep people in their homes
0:35:58 > 0:36:00if at all possible.
0:36:00 > 0:36:03This is about the stability of the community.
0:36:03 > 0:36:07Homeowners and businesses form the backbone of our community.
0:36:07 > 0:36:09What we want to do is keep people where they are.
0:36:09 > 0:36:12If we see people moving out of their homes,
0:36:12 > 0:36:13they have got to be going somewhere.
0:36:13 > 0:36:16If we presume they are not all leaving the borough,
0:36:16 > 0:36:18they must be moving in with other people,
0:36:18 > 0:36:21so they can be putting pressure on other homes.
0:36:21 > 0:36:25It will be difficult with the housing register because people will be
0:36:25 > 0:36:28looking to come onto an already stressed housing register.
0:36:28 > 0:36:33Because councils have to be informed about repossession orders,
0:36:33 > 0:36:35Mark became aware that Mandy was due in court
0:36:35 > 0:36:37and on the brink of losing her home.
0:36:37 > 0:36:40I'm one of these that tries to sort it out myself,
0:36:40 > 0:36:44but it has obviously got to the stage this time where I can't.
0:36:44 > 0:36:47I am hoping, relying on Mark.
0:36:49 > 0:36:53With just two days until the court hearing, Mark needs
0:36:53 > 0:36:58to prepare a concrete defence and he has got something up his sleeve.
0:36:58 > 0:37:02Any loan under 25,000 is regulated by the Consumer Credit Act.
0:37:02 > 0:37:06That means that you can apply for something called a time order.
0:37:06 > 0:37:10A time order means asking the court to change the deal and give you
0:37:10 > 0:37:14more time to pay a loan if you have fallen behind with the payments,
0:37:14 > 0:37:17irrespective of what the original deal stated.
0:37:17 > 0:37:20The judge has absolute discretion to do whatever
0:37:20 > 0:37:23he chooses in that case about the repayment.
0:37:23 > 0:37:29It is based on the means to pay and the intent to pay.
0:37:29 > 0:37:33But getting a time order isn't necessarily easy.
0:37:33 > 0:37:39It means Mandy must appear in court and tell the judge about her difficult personal circumstances
0:37:39 > 0:37:43and convince the court that she will pay the loan.
0:37:43 > 0:37:45If they repossess the house, I haven't got any plans
0:37:45 > 0:37:47because, at this precise moment, I've got nowhere to go.
0:37:47 > 0:37:50I'll be living in my car.
0:37:50 > 0:37:53It's the big day and Mandy drives off to the court.
0:37:53 > 0:37:57She leaves her home not knowing if she has a future there.
0:37:58 > 0:38:03Mark arrives at the court too and he tries to help Mandy keep calm.
0:38:03 > 0:38:05- Feeling nervous?- Scared.
0:38:05 > 0:38:07You won't have to say anything.
0:38:07 > 0:38:10All the judge is going to do is ask you who you are.
0:38:10 > 0:38:12He will understand you are a bit nervous.
0:38:12 > 0:38:17It's just a case of what we can put in front of him
0:38:17 > 0:38:20that he's going to be happy with.
0:38:20 > 0:38:25I just got it in my head that I'm not going home after today.
0:38:25 > 0:38:28Can't tell with the court because it's down to the judge,
0:38:28 > 0:38:31not what I think. It's what the court thinks.
0:38:31 > 0:38:37I think the best thing is we go in there and keep our fingers crossed.
0:38:37 > 0:38:42- Are you all right?- I think so. - You won't have to do a lot.
0:38:42 > 0:38:45Just follow my lead, all right?
0:38:45 > 0:38:46OK.
0:38:52 > 0:38:55After an agonising legal battle, finally,
0:38:55 > 0:38:58Mandy and Mark emerge from the courts.
0:39:02 > 0:39:03Yeah, we got a time order.
0:39:03 > 0:39:06It is going to be reviewed after four months,
0:39:06 > 0:39:08but we got all the terms that we wanted.
0:39:08 > 0:39:09Yeah.
0:39:09 > 0:39:11The solicitor didn't know where he was.
0:39:11 > 0:39:14- He didn't know where to look. - We got a good result there.
0:39:14 > 0:39:16Excellent. I'm really pleased.
0:39:16 > 0:39:20Mark put the case to him about what we would offer and all that.
0:39:20 > 0:39:23He just looked through it and agreed with it, basically.
0:39:23 > 0:39:28I've got to come back for a review in about four months.
0:39:28 > 0:39:30I've still got a home.
0:39:30 > 0:39:32SHE LAUGHS
0:39:32 > 0:39:36Thanks ever so much. I'll speak to you in four months.
0:39:36 > 0:39:38Mandy's time order means she keeps her home,
0:39:38 > 0:39:42but must pay the new agreed amount.
0:39:42 > 0:39:46The court will review in four months to make sure she is doing what she promised.
0:39:46 > 0:39:50They saved my home, they saved me. They saved everything.
0:39:50 > 0:39:55I probably see 20-30 repossession hearings every month
0:39:55 > 0:39:57that comes to Basingstoke.
0:39:57 > 0:40:01Our success rate of keeping people in their homes is about 85%.
0:40:01 > 0:40:03We think that's really good.
0:40:03 > 0:40:07Most of that is by people picking up the phone, talking to us, turning up at court.
0:40:07 > 0:40:13She has gone from an absolutely hopeless situation,
0:40:13 > 0:40:15not knowing where she'll be, to being able to remain in her home.
0:40:15 > 0:40:19I think we can all appreciate what that would mean inside.
0:40:24 > 0:40:28Earlier, we heard about ex-soldier Alan Wilson's worst ever deal
0:40:28 > 0:40:31with his bank Northern Rock.
0:40:31 > 0:40:34They repossessed his house that was worth £112,000
0:40:34 > 0:40:39and sold it at auction for just £67,000.
0:40:39 > 0:40:42Only around half of what he owed on his mortgage.
0:40:42 > 0:40:46They then chased Alan for the shortfall.
0:40:46 > 0:40:50Registered debt counsellor and former policeman Mike Thomas
0:40:50 > 0:40:54has advised him to declare himself bankrupt and since his last visit,
0:40:54 > 0:40:58an Army charity has agreed to pay the bankruptcy fees.
0:40:59 > 0:41:01Today, with his girlfriend and Mike,
0:41:01 > 0:41:06he arrives at Stoke-on-Trent County Court for his bankruptcy hearing.
0:41:06 > 0:41:09Bankruptcy still carries a stigma for many people.
0:41:09 > 0:41:13For someone in Alan's position, who has already lost their home
0:41:13 > 0:41:16and has little prospect of ever repaying their debts,
0:41:16 > 0:41:19Mike believes it is the only sensible option.
0:41:19 > 0:41:22Going bankrupt would mean all Alan's financial
0:41:22 > 0:41:26affairs would be looked after by the official receiver or a trustee.
0:41:26 > 0:41:29Basically, he would become free from debt.
0:41:29 > 0:41:32As a bankrupt, he wouldn't be allowed to do
0:41:32 > 0:41:37some things like get credit for over £500 without disclosing bankruptcy.
0:41:37 > 0:41:41Most first-time bankrupts are discharged after one year.
0:41:41 > 0:41:45I'm nervous. I've never been in this environment before.
0:41:45 > 0:41:47I am quite nervous.
0:41:47 > 0:41:51I don't know how the protocol works or what is going to be said to me.
0:41:51 > 0:41:57I hope they'll look favourable on me and see that I have tried.
0:41:57 > 0:42:00I have not just tried to enjoy myself.
0:42:00 > 0:42:02And this is how I got there.
0:42:02 > 0:42:06Hopefully, they will go in my favour.
0:42:07 > 0:42:12An hour and a half later, Alan comes out of the court, officially declared bankrupt.
0:42:14 > 0:42:17- Are you all right?- It's done now.
0:42:17 > 0:42:20- His debts are now behind him. - That's it.
0:42:20 > 0:42:24Alan has become one of the 330 or so people who are going
0:42:24 > 0:42:27bankrupt in the UK every day.
0:42:27 > 0:42:31I don't believe it. Honestly, I can't believe that's it.
0:42:36 > 0:42:38Happy?
0:42:39 > 0:42:41Yeah, I just can't believe it.
0:42:43 > 0:42:45Thanks, Mike. Thank you.
0:42:45 > 0:42:47Thank you very much.
0:43:07 > 0:43:10Subtitles by Red Bee Media Ltd