NEWS

12 Jun 2015

Loan shark fails in appeal against confiscation proceedings

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Richard Barraclough QC has successfully led the prosecution in the case of a loan shark who appealed against a confiscation order made against him for £177,000.00. He had argued that his assets and monies were not part of his money lending business and had been accrued by other means.

Richard Barraclough recently wrote a detailed article on the case entitled Last Ditch Attempt to Defeat POCA in the Consumer Protection Field.

In the case R v Chapman (Stephen Roy) 2015 [EWCA] 694 the defendant was a loan shark, who had loaned £136,890 – recovered £220,840 with a profit of £83,950. His assets included a house (purchased according to the prosecution with the proceeds of his money lending and monies in a bank account). The defendant had asserted that his father had an interest in the house because he had made lump sum contributions to the mortgage. The prosecution pointed out that the property had been purchased with cash, and had never had a mortgage on. The defendant then asserted that his father had provided cash to fund the initial purchase.

The defendant argued that there was no jurisdiction to make a confiscation order as a result of s170 of the Consumer Credit Act 1974, or that payments had been received from lawful loan agreements & therefore there had been no benefit from unlicensed money lending. Both arguments were rejected, as was an application that benefit should be limited to profit, and a confiscation order was made for £177k.

The defendant appealed again arguing that s170 of the Consumer Credit Act 1974 meant that the Court had no jurisdiction to make a confiscation order. The Court of Appeal confirmed that this section has a very limited ambit and does not deprive the Court of jurisdiction to make a confiscation order. The defendant also argued that the confiscation order was disproportionate, as the wrong doing was simply a failure to obtain a licence – there was no dishonesty, deprivation of protection or aggravating factors. The Court of Appeal rejected this and confirmed the order was proportionate – reconfirming that there is nothing disproportionate about removing from an unlawful business the proceeds it has generated.