Illegal loan or friend loan.

elsien

I’m sure the employer would be interested to know that an employee is working as an unlicensed loan shark.
Another lever your partner may have should she wish to use it. 

powerspowers

TripleH said:

Well the email saying she lent £2,000 but expects £2,600 is very helpful.

Op, we can't tell you what to do but I would submit my concerns to both the Police and HMRC separately (HMRC tend to like nice easy prosecutions and will have a lot of data to hand about declared incomes).

How much has your wife borrowed in total and how much has she paid back?

The police don’t prosecute illegal money lending- it’s a trading standards matter. The illegal money lending team (stop loan sharks) at Birmingham city council covers the whole of England. 

Gus73

Thanks for all the advice from everyone,we discussed everything but she did not want to report them so I told my partner that they should only pay the actual loan amount back as this is what an actual friend would expect, and the extra amount and the interest makes it an illegal loan. They have now agreed to accept just the initial 2000 minus what my partner had already paid. So it will help my partners situation and will take away a lot of the stress and worry , I would have gone down a different route after reading all your posts but I have to accept her wishes.

TripleH

Thank you for the update.

Hopefully this is a resolution but be careful this 'friend' doesn't apply pressure in the future when as they see it, the dust has settled.

I'd keep the email just in case.

Gus73

TripleH said:

Thank you for the update.

Hopefully this is a resolution but be careful this 'friend' doesn't apply pressure in the future when as they see it, the dust has settled.

I'd keep the email just in case.

Yes I will definitely do that and get my partner to tell me if she ever tries to bring it up

Schwarzwald

1- Set up an anonymous yahoo email address and email the employer’s compliance/legal department, not blaming the person, just informing them about the colleague lending.

2- only pay the amount borrowed, not the interest.

SusieT

As an aside from the loan, and re your comment about the interest stopping on the card debt. Firstly, if your partner starts a DMP and will be paying less than the contractual amount, the creditor(s) will mark the credit history as AP (arrangement to pay) which will stay on the report for 6 years from the final payment. If they do not start the DMP for a few months until the card(s) have defaulted, the default will stay on her report for 6 years and will then disappear even if she has not finished paying for it. Obviously if they work in a position that requires no defaults on the credit history that is not an option, but worth keeping in mind. Secondly, if the accounts are defaulted interest will stop at that point, there are some creditors do not stop interest when someone goes on a DMP and that can bite later on when you think that you have paid everything and then find there is more outstanding. 
Stopping payments until the account(s) default also gives the opportunity to put that money away in a savings account so that if something unexpected crops up they have something to fall back on without reaching for a card or loan.