Beware - the loan sharks are circling

A recent report by Circle Anglia, an affordable housing provider, claims that around 100,000 more people from the UK's poorest families borrowed £29 million from loan sharks to get through Christmas.

As these vulnerable families will probably have to pay back around three times the amount they borrowed, it’s not a good start to the new decade.

The report goes on to say that, on average, people turning to loan sharks borrow just £288 – but with an interest rate of 800% or more, and the average expected repayment period just one year, repayments can be enormous and their debt quickly grows.

What is a loan shark?

According to the English thesaurus a loan shark is a 'swindler', 'crook', 'double-dealer' or 'con artist'. 

However, in legal terms, a loan shark is an unlicensed moneylender. Basically, an individual or firm that lends money but is not licensed by the Office of Fair Trading to do so.

Let’s break that down further – loan sharks operate outside of the law because they are unlicensed. This means their behaviour and other activities are likely to also be unlawful.

People who turn to loan sharks are likely to...
Pay a very high rate of interest
Get a loan on terms that suits the lender and not the borrower
Be put under pressure to borrow more to pay off another debt
Be harassed or intimidated if they get behind with repayments

How can I find out if a lender is licensed?

The Consumer Credit Public Register lists everyone with an Office of Fair Trading licence.

The register details the trading names and the activities for which a business is licensed. It also includes anyone who has previously applied for a licence, and those who have had their licence taken away or been suspended.

You will not be charged to gain access to this information.

You can also call the register's helpline (020 7211 8608) between 9.30am and 4pm, Monday to Friday.

Help – I’ve borrowed from a loan shark

If you feel you are  a victim of a loan shark - or you know someone who is operating in your community - then contact Trading Standards' illegal money lending team on its 24/7 confidential hotline (0300 555 2222). Alternatively, you can text ‘loan shark’ and a message to 60003.

This team has trained staff (often former police officers) on hand to help you deal with your situation and the loan shark.

All reports are treated in confidence and the safety of the person calling is given the highest priority.

Because loan sharks lend money illegally, you are under no legal obligation to repay the debt. Any lender that is not licensed by the Office of Fair Trading has no legal right to recover the debt.

What can I do if I get harassed?

It is an offence for any lender, whether licensed or unlicensed, to harass you. Keep a note of any harassment, date and time it took place and (if you can) get a witness. You should report any harassment to your local Trading Standards Office.

Any threats or use of violence should also be reported to the police.

Alternatives to loan sharks

Many people who borrow from loan sharks are desperate for money but feel they will be rejected by their local bank or building society.

However, one option is joining a credit union. It will help you save a little each month and in return it may be able to lend you money at a fair interest rate.

You can search for your nearest credit union on the ABCUL website (Association of British Credit Unions Limited).

More about

Your Comments

Loan sharks are dangerous territory, given the interest rates it, once one has started borrowing from a loan shark it is a vicious downward spiral.

Let me advice you, if you want a legitimate loan lender, i will advice you not to waste your time with all this fake online scam, i will advice you to contact Mr Shedrack Thompson on for a legit loan today, i have tried him and he didn't fail so i recommend people to him so why not try him today....
Mr Chamber Jones.