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Illegal money lenders, or loan sharks, are a problem across the country. Loan sharks are not a community service and should never be used under any circumstances.

There are other affordable credit options available to you if you need to borrow money, even if you have been turned down for credit or a loan in the past.

What is a Loan Shark?

Loan sharks are unlicensed money lenders who often charge very high interest rates and sometimes use threats and violence to frighten people who can’t pay back their loan.

Licensed moneylenders are regulated by the Office of Fair Trading (OFT). Unlicensed loan sharks work outside of the law. If you have borrowed from a loan shark you have not broken the law, they have. Licensed money lenders are regulated by The Financial Conduct Authority.

If you borrow from a loan shark it’s likely you will:

  • get a loan on very bad terms
  • pay an extortionate rate of interest
  • be harassed if you get behind with your repayments
  • be pressured into borrowing more from them to repay one debt with another

How to spot a loan shark

A loan shark

  • may appear to be your friend at first offering to lend you money
  • rarely offer paperwork you don’t really know how much you owe
  • charge very high interest rates
  • add additional amounts to the debt so you struggle to pay
  • take items as security such as passports and bank cards
  • resort to extreme methods to reclaim their debts such as threats, intimidation or violence

How do I know if a money lender is unlicensed?

You can check the Financial Services Register online to see if a lender is licensed. This lists all approved lenders and financial services.  It is free to get basic information from the register, including trading names and the activities for which a business is licensed.

If a lender doesn’t have a current licence, don’t borrow money from them.

What if I have borrowed money from a loan shark?

If you have already borrowed money from a loan shark you are under no legal obligation to repay the debt. Loan sharks sometimes frighten people by saying they’ll be prosecuted and even sent to prison if they don’t pay up, but it is the lender who has committed a crime, not you. You can report the loan shark confidentially to the STOP LOAN SHARKS team.

How to report a loan shark

You can call report a loan shark or suspected loan shark to STOP LOAN SHARKS. They have a free and confidential hotline open 24 hours a day 7 days a week . Or you can send them a text, email or a private Facebook message.

What to do if you owe money to a loan shark.