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Loan Sharks

Tuesday, 28th April 2009

With millions of consumers in the UK finding it difficult to meet monthly bills it is inevitable some will fall foul of the 'loan shark'. If you know of someone that has or is about to use this facility then it is important you steer them to this article first.

Full contact details to take out a loan shark are at the foot of this page.

What is the definition of a loan shark?

According to the English thesaurus a 'loan shark' is a 'swindler', 'crook', 'double-dealer' or 'con artist'. I can't really argue with that but what is clear is that within the law a 'loan shark' is an unlicensed moneylender. This is someone or a firm that has lent you money and is not licensed by the Office of Fair Trading, often referred to as (OFT).

A person or firm can only legally lend money if they are licensed and regulated by the OFT and they must also follow the OFT's strict codes of practice.

By going to a loan shark you may experience some or all of the following;

  • You pay a very very high rate of interest
  • You get a loan on terms that suits the lender and not you
  • You may be put under pressure to borrow more to pay off another debt off as this makes more money for the loan shark.
  • You may be harassed or intimidated if you get behind with your repayments.

Remember loan sharks are not licensed therefore they operate outside the law.

How do you find out if a lender is licensed?

The OFT has recently formed a 'Consumer Credit Public Register' that lists everyone with an OFT licence. This will also include anyone that has previously applied for one or has had one taken away or suspended. The register will also detail trading names and the activities for which a business is licensed.

You will not be charged to gain access to this information, it's free.

You can search the 'Consumer Credit Public Register' by either visiting  www2.crw.gov.uk/pr/Default.aspx then click on CCA SEARCH or telephone 020 7211 8608, between 9.30am and 4pm, Monday to Friday.

If you find that the lender isn't listed as having a current licence to lend money then don't borrow money from them.

Who else can I borrow money from?

If you are unsuccessful with the bank then try joining a 'Credit Union'.

The Government recently relaxed the rules on ‘Credit Unions’ to make it easier for them to operate. They will help you save a little each month and in return they will eventually make an advance to you but with a very fair interest rate. Sometimes these ‘Credit Unions’ offer lower interest rates than other recognised UK lenders.

For example if you had a £200 loan then often the interest will only be at 1% which in this case, will make the interest payable to be £2 per month.

How to find a Credit Union

It is relatively simple to do - go to Find Me A Credit Union

I'm worried now as I have borrowed from a loan shark

You may wish to contact your local Trading Standards office as they have staff trained to help you deal with the 'Loan shark'

How do I find my nearest Trading Standards Officer?

Click on this link www.tradingstandards.gov.uk/ to find your nearest Trading Standards Office, then enter your postcode in the box located on the right-hand side of the Trading Standards website homepage.

Do I legally have to repay the debt to a loan shark?

No, you are under no legal obligation to repay the debt. If the lender is not licensed by the OFT, from 1st April it will be the Financial Conduct Authority (FCA), then they have no legal right to recover the debt. Remember it is not a criminal offence not to repay a loan from an unlicensed lender.

What to do if you're being harassed

It is an offence for any lender, whether licensed or unlicensed, to harass you.

Keep a note of any harassment, dates 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.

See below for our list of the telephone hotline numbers to report a loan shark or any other illegal money lender.

Word of warning

It is always advisable to go to a licensed lender as this gives you protection under the Consumer Credit Act. But bear in mind that just because the lender is licensed it does not necessarily mean that the lender is offering the best interest rate. The licence is to cover practices and codes of conduct and is not given to a lender because they have a good interest rate, so always shop around and try and seek the best deal from 3 or 4 lenders.

Door step lenders

These are completely different and are regulated by the OFT, however they can have higher interest rates than normal High Street lenders, but serve a purpose and for many they work well.

Click for the Debtwizard guide to door step lenders

How to report a loan shark - contact the Illegal Money Lending Teams


For the whole of England - Phone on 030 0555 2222 or email at This email address is being protected from spambots. You need JavaScript enabled to view it.

Wales - Phone on 03001 233 311 or email at This email address is being protected from spambots. You need JavaScript enabled to view it.

Scotland - Phone on 01412 876 655

Text - 60003

Facebook Stop Loan Sharks Project



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