Illegal money lenders, or loan sharks as they are also known, are people who lend money without the proper authorisation or motivation to do so.
Illegal money lending is on the increase - with serious and often dangerous consequences for people who borrow money and who find it almost impossible to break free from the debt.
It is estimated there are over 300,000 people in debt to illegal money lenders in Britain. People being targeted include those with poor credit history, on a low income, have issues with benefits and who face everyday pressures to make ends meet.
If you answer yes to any of the following, it’s possible you borrowed from a loan shark:
- were you offered a cash loan?
- did they not provide you with paperwork?
- did they add huge amounts of interest or annual percentage rate (APR) to your loan?
- did they change the terms of the loan without warning?
- have they threatened you?
- did they take your bank/post office card, passport, watch or any other valuables from you?
- have they refused to allow you to settle the debt?
Loan sharks claim you will be prosecuted and even sent to prison if you don’t pay up. But this can’t happen as they are unauthorised lenders and the loan is illegal.
The Financial Conduct Authority (FCA) keeps details of all authorised lenders. If a lender isn’t listed by the FCA, don’t borrow money from them - and don’t let them into your home.
Any lender – authorised or not – who harasses you is breaking the law.
We can help
If you’re experiencing financial difficulties and using illegal money lenders, we can help. We have a range of money and benefit support services, including:
- My Money Service: offers personalised mentor support to help you tackle debts, manage your money and help you access affordable credit products
- Welfare Benefit Service: get personalised advisor support to help you with your welfare payments and help you claim everything you are due, and
- Fuel Advice Service: our personalised advisor support service to make sure you are on the most affordable energy deal.