Loan Sharks:
What You Need to Know
Who are Loan Sharks?
Loan sharks are unlicensed lenders who operate outside the law and may charge overly high interest rates. These illegal lenders are not regulated by the Financial Conduct Authority (FCA). Their practices are unsafe and unfair. They prey on people in urgent need of cash. Loan sharks may also resort to intimidation, threats, or even violence to collect repayments.
Why are Loan Sharks a problem?
Loan sharks are unlicensed lenders who operate outside the law and may charge overly high interest rates. These illegal lenders are not regulated by the Financial Conduct Authority (FCA). Their practices are unsafe and unfair. They prey on people in urgent need of cash. Loan sharks may also resort to intimidation, threats, or even violence to collect repayments.
- Charge unfair, high-interest rates.
- Add extra fees without warning.
- Pressure borrowers with threats or violence.
- Use tactics like increasing interest rates or adding hidden fees. This can make it difficult for borrowers to repay the loan in full.
- Using a loan shark might seem like a quick fix, but it can make financial problems worse.
Mother of three, Michelle, borrowed £100 from a local loan shark to buy school uniforms for her kids. Over two years, this escalated into a debt of £26,000. The loan shark’s threats and harassment led her to flee her home with her children, leaving all their possessions.
Billy from South Wales borrowed over £30,000 from loan sharks. When he missed a payment, he was abducted from his home in the night, taken to a field and ordered to dig his own grave. On another occasion, his children were threatened.
Victims have been coerced into prostitution to repay debts. A woman from Stockport recounted how her initial £150 loan quickly escalated to a £6,000 debt. Unable to meet the exorbitant repayments, she was forced into sex work in lieu of payment.
Stop Loan Sharks
Stop Loan Sharks is a government-backed service dedicated to tackling illegal lending. They work to protect people and communities from the dangers of loan sharks. This team investigates illegal lending and brings offenders to justice. They also support victims with free, confidential help.
How they are changing the industry?
Stop Loan Sharks raises awareness about illegal lending and promotes safe borrowing practices. Their work includes:
- Providing resources to help people recognise and avoid loan sharks. They check for a valid FCA license and understand the typical tactics used by these illegal lenders.
- Offering practical support, including financial advice and legal assistance, to anyone affected by illegal lending.
- Prosecuting Loan Sharks: They take legal action against unlicensed lenders to protect people.
- By standing up to loan sharks, Stop Loan Sharks is making borrowing safer for everyone.
Need Help?
If you believe you have borrowed from an illegal lender you can get help and support.
Contact the stops Loan Shark team if:
You think you have borrowed from a loan shark. You are being threatened by a loan shark.