MONEYLENDERS are seizing social welfare cards from victims unable to repay loans, according to a Cork councillor.

Independent councillor Ken O’Flynn said he has been approached by constituents about moneylenders waiting outside post offices to collect social welfare payments.

He said people are agreeing to hand over cash directly to the moneylender, after it has been withdrawn. The borrower is left access their card only at certain times, leaving the moneylender in full control.

“They don’t operate within the guidelines of a normal bank,” Mr O’Flynn warned. “There is constant pushing, harassment and generally making people’s lives a misery. They are taking social welfare payments from people who are continuously in debt.

“I know of one man who is taking 50% of social welfare payments collected by borrowers each week. He is in possession of a lot of social welfare cards. These are considered security.

“A lot of the people he preys on are single mums who are saving for Christmas and don’t have access to credit. He knows that many of them don’t have a partner to fall back on making them even more vulnerable. People in these situations can be easy to bully or victimise.”

Mr O’Flynn, a city councillor in the Cork North-East Ward, described it as a form of intimidation.

“These people are normally linked to a type of organised crime and there is often a threat of physical assault if a loan can’t be repaid on time,” he said.

Referring to one moneylender, he said: “He is considered the man that you go to if you don’t have credit available. When you meet him, you would think that he is the most decent man on Earth, yet this is how he is making his money.

“People are keeping their mouths shut, because they find the service handy, even though they’re caught in perpetual debt.”

Mr O’Flynn said the money being borrowed is often for occasions. “From what I can see, they are never normally borrowing for themselves. It’s normally for an occasion, such as a communion or confirmation.”

Youth community worker and former Lord Mayor of Cork, Chris O’Leary, said he has also been alerted to local money lenders.

“There have been cases of moneylenders insisting on driving the person to the ATM to empty their account every week,” Mr O’Leary said.

“Normally, that’s on a Friday, after they have been paid. It happens when there isn’t a trust there and the lender wants to be sure he will get his money. The victim is afraid and will agree to anything to avoid a violent outcome.

“Some are slow to contact gardaí, because of desperate things they have done in the past to feed their habits.”

The temptation can be too much for people in financial difficulties.

“The person could simply be someone who falls behind on rent or ESB payments,” Mr O’Leary said.

“It may be a small amount, but the interest rate could be 500 times that. It’s usually the case that they have burnt bridges with mainstream financial institutions. They are vulnerable on a number of fronts and often have no steady income.

“Often, the attraction of money and manipulation of the lender means they go from clearing one loan to taking out another. People can be reintroduced back into the system very easily. They find themselves trapped in a cycle that is just another addition to the poverty trap.”

He pleaded with the public to avoid moneylenders: “All I can do is advise people to contact Mabs or St Vincent De Paul and avoid going down this path at all costs.”

Garda crime prevention officer for Cork City, Brian McSweeney, said gardaí have not received any reports of moneylenders.

However, he advised people to avoid borrowing from anyone outside of financial institutions.

“This is an agreement not regulated or governed by banks,” he said.

“It’s similar to cryptocurrency. The problem is that these people will turn into vultures. 

"The people who are looking for this money are doing so because they can’t get it anywhere else. The repayment percentages are going to be high and if you don’t meet these repayments, it will result in a penalty. Before you know it, you are paying back twice as much money as you borrowed.

“All we can do is advise people not to lend or borrow, because there is nothing to back up the contract if something goes wrong on either side.

“The regulations aren’t there to support you when you need to fight back. If people need to borrow, they should do so from reputable financial institutions.”