If you need to borrow money but have a bad credit rating or have been turned down by your bank, you may find yourself in the position of considering a ‘loan shark’.
Loan sharks are illegal, unlicensed money lenders that charge high amounts of interest even on short-term loans.
They target people with who are in desperate financial situations and, while they may seem friendly at first, they often resort to threats, intimidation or violence to get their money back. Their victims end up paying far more back in interest than they would through any legal borrowing, and they are sometimes pressured into getting further loans to cover the debt.
One woman who borrowed £500 ended up repaying £88,000 (source the Money Advice Service).
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What is a loan shark and how can you spot them
Citizens Advice A ‘loan shark’ is an unlicensed, illegal lender of money. There are many ways to spot a loan shark including:
- If you are not given paperwork to confirm the arrangements of the loan.
- If they refuse to tell you how much you owe, how long you will be repaying the loan or the interest on the loan.
- If they increase the charges or debt.
- If they take personal items as collateral including credit cards and passports.
- If they resort to violence or intimidation if you cannot repay the loan.
In some extreme cases, loan sharks may get those unable to repay loans to repay through illegal activities such as prostitution or drug dealing.
If you are concerned about the a potential loan shark, you can check to see if your lender is licensed by the Financial Conduct Authority (FCA) https://register.fca.org.uk/
Find help and support
If you have been a victim of crime, don’t suffer in silence. Even if you don’t want to report it to the police, tell a trusted friend or family member about it and use them for support.
If you are victim of a loan shark, you maybe concerned about the consequences of reporting them to the police, especially if you have been subjected to violence or intimidation.
You can get support without having to contact the police. The Illegal Money Lending Hotline on 0300 555 2222, offers advice and support. Citizens Advice also offer support and advice on what to do if you are victim of a loan shark. You can also search our directory to find help and support to help you cope and recover from what’s happened.
How to report it
If you suspect somebody of being a loan shark you can report it anonymously through the Illegal Money Lending Hotline:
Illegal Money Lending Team
Text LOAN SHARK and the lender’s details to 60003
Find out about call charges (this number does charge)
In an emergency: dial 999
An emergency is when a crime is being committed or has just been witnessed, there is a risk of injury, or a risk of serious damage to property.
In a non-emergency: dial 101
Use this number to report a non-emergency incident or make a general inquiry.
Contact Crimestoppers on 0800 555 111. Crimestoppers is a charity which is entirely independent of police and never share details with police of people who have got in touch.
Alternatives to loan sharks
If you have been turned away from a bank for credit, there are alternatives to loan sharks.
Credit unions provide financial help to those unable to get it through banks. Greater Manchester has a number of credit unions: