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Don't get bitten by a loan shark

In his latest 'Money Matters' column, Wrekin's Debt & Energy Manager Dan Bebbington looks at some of the tactics used by illegal money lenders.

This week I wanted to put a spotlight on loan sharks. Unlike legitimate lenders, loan sharks aren’t authorised by the Financial Conduct Authority (FCA) – meaning they operate outside the law.

If you borrow from them it's likely you'll:

  • get a loan on very bad terms
  • pay a huge rate of interest
  • be harassed if you get behind with your repayments
  • be pressured into borrowing more from them to repay one debt with another

A loan shark usually has lots of customers and lends money like a business, but their lending is illegal. There’s no mention of how much its going to cost you or how long it will take you to pay it back, because ultimately that’s down to those dreadful opportunists that exploit vulnerable people.

Loan sharks often take other illegal action to collect the money they've lent you. As well as threats of violence, we have come across cases where they have taken people’s credit cards or valuables. In extreme cases, they've been known to force non-payers into prostitution and drug dealing.

During the pandemic loan sharks have used social media to their advantage to ‘advertise’ their offerings. I read a recent report that showed how a business student would use Snapchat to find customers to lend to - then go on to terrorise them when they were unable to pay.

Loan sharks usually present themselves as a friend, and make out they are doing you a favour – at first, they will give you that few days you need. Then their behaviour changes drastically. If someone who has lent you money threatens you or is violent, contact the police straight away. Do this even if it’s an informal loan from someone you know, such as a friend or family member

Loan sharks are unscrupulous criminals who prey on vulnerable people. This type of activity will not be tolerated in our communities and we always work with our partners to ensure robust action is taken against illegal money lenders.

For anyone struggling with money, please do speak up and seek free advice – there are many organisations across that can help with benefit and debt advice. Most money advisors have good links with local Credit Unions. If you need to borrow but you are unable to access credit via high street banks, this may be an avenue to go down.

In England, if you think a money lender is operating without being FCA authorised, you can speak in confidence to the Illegal Money Lending Hotline on 0300 555 2222. You can also email the Illegal Money Lending Team at or text loan shark and your message to 60003.

19th April 2022