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What is a loan shark?

A loan shark is someone who lends money illegally. They often charge high interest rates and may use violence or intimidation if you don’t pay them back.

If you’ve borrowed money from a loan shark or are worried about someone else, help is available. You can report a loan shark in strict confidence by visiting Stop Loan Sharks.

If you’ve been threatened by a loan shark or are at risk of harm, contact the police straight away.

How do loan sharks operate?

Loan sharks are not regulated and authorised by the Financial Conduct Authority (FCA). Instead, they operate outside of the law – offering cash loans with extremely high interest rates, with no paperwork or clear repayment terms. 

Loan sharks tend to target those in financial difficulty. When you struggle to repay the loan, they may use threatening behaviour and pressure you into borrowing more from them to repay one debt with another.

Even if you borrow a small amount, dealing with a loan shark can quickly spiral out of control where you end up owing them a lot of money.

How to spot a loan shark

Spotting a loan shark is not always easy. They can seem friendly and supportive at first, to lure you into a false sense of security. They could even be a family member or friend. 

Loan sharks typically:

  • Offer cash loans but some may operate online too
  • Add extremely high amounts of interest or APR to your loan
  • Do not provide any paperwork or clear information, such as the repayment terms
  • Offer to lend you money with no credit checks or affordability assessments
  • Take your valuables as a ‘security’ on the loan, including your passport and bank cards
  • Use threats or force until you repay the loan
  • Pressure you into borrowing more money, so you remain in debt to them

Some loan sharks pretend to be doorstop or payday lenders – offering short-term loans for small sums of money. However, these lenders need to be authorised by the FCA.

Be cautious of anyone who approaches you and offers you a loan, especially if you haven’t known them for very long.

How to check if a lender is authorised

To be able to lend money legally in the UK, lenders need to be authorised and regulated by the FCA. This is to protect you and your money.

It’s important to always check if a lender is listed on the Financial Services register, and they are who they say they are.

What to do if you’ve borrowed money from a loan shark

Roughly 1.08 million people in the England are estimated to owe money to illegal money lenders.1

Stop Loan Sharks will help you get safely away from loan sharks. You can call them or complete an online form to report a loan shark in strict confidence.

Remember, it’s not illegal to borrow this money – it’s the illegal lender who’s breaking the law. You don’t need to worry about getting into trouble with the police if you report it. 

How to identify a victim of a loan shark

Sometimes, the behaviour of a family member or friend can cause concern. Here are some of the signs to look for. They might:

  • Have debt that keeps growing even though regular payments are being made
  • Say bad things will happen to them if they don’t pay on time
  • Receive threatening messages about money being owed
  • Hand over benefits, money, or personal items (such as their bank card, passport, or jewellery) to someone they owe money to
  • Feel afraid or anxious about visitors coming to their home
  • Not want to leave their house and stop seeing friends and family
  • Become anxious, depressed, withdrawn and experience suicidal thoughts
  • Show signs of physical violence, such as bruises, sprains or cuts

How to help a victim of a loan shark

If you believe someone you know may be a victim of a loan shark, it’s important to:

  • Listen carefully and give them time to talk
  • Acknowledge they’re in a scary and difficult situation but there’s a way out
  • Remind them it’s not their fault, and they are not alone
  • Let them know the loan shark has no legal right to recover the debt
  • Suggest they visit a hospital or GP if they’ve experienced any physical harm

Stop Loan Sharks has a helpline you can call anytime for confidential advice and support, as well as a Live Chat. 

For more information, visit Stop Loan Sharks: Worried about someone else.

Help with money worries and debt

If you (or someone you know) is anxious about money or feel overwhelmed with debt – there’s help available. StepChange and National Debtline provide free advice and support to help you tackle your debt.

If you bank with us and need support, please get in touch – we’re also here to help with any money worries or financial anxiety you may have.