STOP LOAN SHARKS: They are illegal and unregulated moneylenders.
Unlicensed loan sharks are most renowned for charging exorbitant interest rates on loans.
Loan sharks use threats to intimidate and frighten borrowers into making a payment. They often use threatening behaviour and physical violence.
Because they do net get regulated, you often find a loan shark targeting families on low incomes. They prey on the borrowers that find themselves struggling through a difficult period.
The Financial Conduct Authority regulate licensed moneylenders in the United Kingdom. As such, all lenders must follow FCA codes of practice.
But, unlicensed loan sharks operate outside the rule of law in the United Kingdom. Borrowing money from a loan shark means:
- You will get a loan but based on very bad terms with a high rate of interest to pay back.
- They will harass you if you fall behind with the repayments.
- They pressure you into borrowing more money from them to repay one debt by taking another loan.
Check a Registered Lender
You can check whether a company has authorisation to lend money by searching the Financial Services Register. It lists companies and individuals authorised by the Financial Conduct Authority.
Note: If not, you can ‘report a loan shark anonymously‘.
Reporting a Loan Shark UK
Note: The method of reporting a loan shark anonymously varies in the United Kingdom. Check the list below if you spot an illegal loan shark and want to report them. The same process applies if you borrowed money from an unlicensed money lender.
Trading Standards Scotland
How to report a loan shark online
Telephone: 0800 074 0878
Trading Standards Consumerline
Telephone: 0300 123 6262
Borrowed Money from a Loan Shark?
Borrowing money from an illegal loan shark means you have no legal obligation to repay the debt. Instead, you should contact your local Trading Standards office without delay. They will help you cope with the situation and they will deal with the unregulated money lender.
Do You Need to Repay a Loan Shark?
Lenders who are not licensed by the FCA have no legal right to recover the debt. United Kingdom law allows a courts bailiff to collect a debt using specific powers. But, loan sharks try to frighten people who do not pay with prosecution and threats of a prison sentence.
Note: The law does not allow this to happen! Not repaying a loan from an unlicensed money lender does not commit a criminal offence.