Do you know how to spot a loan shark?

What is a loan shark?

Loan sharks are money lenders who aren’t authorised by the Financial Conduct Authority (FCA) to lend money legally. These illegal moneylenders usually charge very high interest rates and may resort to threats and harassment to get you to pay back the loan or to borrow more.

You can check if a company is authorised to lend money by checking the register on the FCA website at www.fca.org.uk.

Loan Sharks sometimes use trust and friendship to trap people in loans they cannot afford. So, while loans from friends and family are usually safe, if you’re being pressured to repay more than you can afford, then they are loan sharks.

Some warning signs to look out for in a potential lender are:

• Offering a cash loan
• Providing no paperwork
• Using threats or harassment to make you pay
• Refusing to give clear information on the loan
• Taking things from you if you are unable to pay on time
• Continuously adding interest so the debt doesn’t go down
• Wanting to keep something you own until the loan has been repaid.

If you’ve already accepted a loan from a loan shark, know that you’ve done nothing wrong. The loan shark is the one committing the crime not you, so you can report them to Stop Loan Sharks, and you have no obligation to pay back money that has been lent to you illegally. You can make your report anonymous if you’re scared of retaliation from the loan shark.

If you’re being harassed by a loan shark, please contact the police.

How to get support

If you need advice on different ways to borrow money or help with budgeting, please contact CAB or a registered money advice service such as Stepchange or National Debtline.

We also provide financial support and advice to our customers on our website, Abri.co.uk and cost of living support on our hub: Cost of Living hub (abri.co.uk)