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Loan sharks have many faces – make sure you know who’s behind the mask

What does a loan shark look like to you?


The chances are the image that springs to mind is the TV soap gangster. But in reality they are not always that easy to spot.


They could just as easily be that neighbour who always stops to chat, a parent who you know from the school gate, a popular work colleague, even a long-standing family friend.


The one thing they have in common is that they are expert manipulators and masters of deception, often befriending victims and offering a quick-fix loan.


And with Christmas just past they may be more active than usual, aware that with the cost-of-living crisis, people may be under increasing financial pressure.


Victims often aren’t aware that they have borrowed from a loan shark until it’s too late. Things can quickly turn nasty as they demand extortionate repayments and issue threats of violence when you can’t pay.


Figures from the England Illegal Money Lending Team, an organisation that works in partnership with trading standards authorities to investigate and prosecute illegal lenders and support victims, show that in the first half of 2023, 56 per cent of the people it worked with said they thought they were borrowing from a friend.


But there are warning signs to look out for, and alternatives available for those who need access to affordable credit but who might have been turned down by the mainstream banks.


What is a loan shark?

A loan shark is another term for an illegal money lender – someone who lends money and asks for repayments, but who does not have the necessary authorisation from the Financial Conduct Authority (FCA).


Why do people turn to loan sharks?

Often someone may be looking for a small amount over a short period to cover unexpected expenses. They may have been refused credit elsewhere and need cash at short notice. In the cost-of-living crisis, more people are being forced to borrow to cover basic living costs such as bills and food.


What are the warning signs that someone is a loan shark?

There are a number of giveaways that indicate the person you are borrowing from is not a legitimate lender.

They can include:


  • You are given no paperwork or details about the loan

  • The lender demands repayments that add up to much more than you initially borrowed

  • They intimidate or threaten you if you struggle to pay

  • They demand you hand over items like bank cards or a passport until you can pay


Where can I go to borrow money if I have been turned down by the banks?

Credit unions offer an alternative, ethical and safe way of borrowing for people who may have been refused credit elsewhere. They can offer small loans at affordable rates. Visit www.findyourcreditunion.co.uk to find one nearest to you.


What should I do if I think I have been targeted by a loan shark?

Contact the England Illegal Money Lending Team. There is a host of information on its website www.stoploansharks.co.uk.


You can:


Remember you have done nothing wrong if you have borrowed from a loan shark. It is the lender who has committed a crime.


About the author

The England Illegal Money lending Team, also known as Stop Loan Sharks, investigates and prosecutes illegal money lenders and provides support for borrowers.


If you have borrowed from a loan shark or are worried about someone else, we’re here to help and keep you safe. Our specially trained staff will provide emotional and practical support that is tailored to your needs.


It is estimated that there are 1.08 million people in debt to illegal money lenders in England. The England IMLT works in local communities, within education, and with partner agencies including the police.


Since 2004, team has supported over 31,100 people and written off more than £91.2m worth of illegal debt. Over 413 prosecutions have been secured for illegal money lending and related activity, leading to 594 years’ worth of custodial sentences.

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