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Loan sharks

Loan sharks are illegal lenders who often target low income and desperate families.

Loan sharks may seem friendly at first, but borrowing from them is never a good idea – even if your credit rating is poor or you only need a small amount for a short while.


Why are loan sharks bad news?

Loan sharks will start out being friendly. And if you keep up your repayments, they will stay that way. But the reality is, even if you do, any money you borrow will come at a high price. Loan sharks gain complete control of the victims and their finances.

There are many risks attached to borrowing from a loan sharks:

  • You pay far more in interest than you would through any legal borrowing. One woman who borrowed £500 ended up repaying £88,000.
  • You may be harassed if you get behind with your repayments. You are often pressured into borrowing more money to repay one debt with another.


How can you spot a loan shark?

A loan shark may:

  • Offer little or no paperwork, such as a licence, credit agreement or record of payments
  • Increase the debt or add additional amounts to it without your permission
  • Refuse to give information, such as the interest rate or how much you still owe
  • Take items as security, such as passports, bank cards or driving licences
  • Not allow you to settle your debt
  • Get nasty – they may resort to intimidation, threats or violence


How to check if a lender is genuine

The Financial Conduct Authority (FCA) keeps details of all licensed lenders, as well as everyone who has applied for a licence or has had one taken away or suspended. If a lender isn’t listed as having a current licence, don’t borrow money from them and don’t let them come into your home. Loan sharks offer loans without the correct permission from the FCA and as such, are breaking the law.


Check the FCA register

To see if a lender is licensed:

Visit the FCA website
Email Consumer Queries
Telephone: 0800 111 6768, Monday to Friday, 8am to 6pm, Saturday, 9am to 1pm


Loan sharks and the Law

Although some loan sharks resort to intimidation and even violence, they are not beyond the law. Any lender – licensed or unlicensed – who harasses you is breaking the law. Some loan sharks will threaten you by saying you will be prosecuted and even sent to prison if you don’t pay up. This can’t happen – an unlicensed lender such as a loan shark has no legal right to recover the debt. In fact, they have no legal right to make you pay the loan back at all – because the loan is illegal.


What can I do about a loan shark debt?

If you've borrowed money from a loan shark, the most important things to remember are:

  • You've not done anything illegal and you won't get in trouble with the police.
  • It's illegal to lend money without a licence, but it is not illegal to borrow money from a loan shark.
  • You don't have to pay the money back.
  • If the money was lent illegally, the loan shark has no legal right to collect it and they can't take you to court to get it back.
  • Don't stop paying a loan shark if you're worried about your safety. Get advice from a specialist before you make a decision.


Getting advice

You can get expert, confidential help by contacting the specialist teams at Trading Standards:

  • England Illegal Money Lending Team – 0300 555 2222
  • Wales Illegal Money Lending Team – 0300 123 3311
  • Scotland Illegal Money Lending Team – 0141 2876 655
  • Northern Ireland Trading Standards Consumer Line – 0300 123 6262

These teams are experts at dealing with loan sharks. They can give you advice on your options, whether to stop payments, and what to do next. You can contact them confidentially and you don't need to give your name.


Alternatives to loan sharks

If your income is low, you have a poor credit rating or you only need a small amount for a short while, there are still reputable lenders you can turn to instead of loan sharks.

Credit unions - If you’re on a low income or you need to improve your credit rating and you need to borrow a small amount for a short time, look into borrowing from a credit union. You will generally have to join first and some credit unions may ask you to save a small amount before you can borrow. For more information on Credit Unions please refer to our Credit Union leaflet: Help from the government – make sure you are getting all of the benefits you are entitled to. Use an independent benefits calculator to find out what benefits you could get and how to claim. These are free to use and anonymous. For more information go to Benefits Calculator

Budgeting Loans - If you desperately need to borrow money, you may be able to apply for an interest-free Budgeting Loan from the Social Fund.


Where to get help and advice

If you’re thinking about using a loan shark because you can’t borrow money anywhere else, there are a number of organisations which offer free debt advice:

Citizens Advice
03444 111 444

StepChange Debt Charity
0800 138 1111

National Debtline
0808 808 4000