Loan sharks

What is a loan shark

A money lender has to be authorised by the Financial Conduct Authority (FCA) to lend money legally. Money lenders who aren’t authorised by the FCA are breaking the law. They are known as loan sharks.

Loan sharks often work from home, charge very high rates of interest and don't give you much paperwork to confirm the arrangements they've made with you. A loan shark usually has lots of customers and lends money like a business, but their lending is illegal.

Loan sharks often take other illegal action to collect the money they've lent you, such as threatening violence or taking away your credit cards or valuables. In extreme cases, they've been known to force non-payers into prostitution and drug dealing.

Important

If you’re threatened by someone who lends you money

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.

Borrowing from friends or family

Not all lending needs to be authorised by the FCA - for example, informal, one-off loans between friends or family aren’t against the law. If you’re not sure if a loan needs to be authorised by the FCA, get help from your nearest Citizens Advice.

Even if a loan is informal, anyone who lends you money can’t do anything illegal when they collect it, such as harassing you.

Checking a lender is authorised

If you borrowed money from someone who isn't FCA authorised, you haven’t broken the law, they have.

You can find out whether a money lender is authorised by checking the register on the FCA website at www.fca.org.uk.

If you think you owe money to a loan shark

You can contact the Illegal Money Lending Team.

Further help and information

For more information about different ways of borrowing money and getting credit including dealing with loan sharks, see Types of borrowing.

You may also find the following information helpful:

• Getting the best credit deal

• Credit cards

• Credit

• Banks and building societies

• Help with budgeting

• Help with debt in England, Wales and Northern Ireland

• Help with debt in Scotland.

The Money Advice Service

The Money Advice Service is a free, independent service. Their website (www.moneyadviceservice.org.uk) has lots of useful information about borrowing and managing your money.

Go to their website for more information about:

• hints and tips about managing your money

• cards and loans

• if things go wrong

• shopping around