According to the Centre for Social Justice, an estimated 1.08 million people in England alone are borrowing money from illegal money lenders (more commonly known as loan sharks). As the cost of living spirals further and daily costs get out of control, we at Citizens Advice are concerned that loan sharks might take advantage of people who are desperate for money. Moreover, people might feel tempted to use loan sharks in the run up to Christmas as they might see them offering them a way out of their financial troubles.
Citizens Advice Plymouth received funding from the England Illegal Money Lending Team to raise awareness of the issues of illegal money lenders and this money has come from the Proceeds Of Crime Act and has been taken from convicted illegal money lenders.
In this project we want to focus on those groups of Plymouth residents that might struggle with understanding complex financial information or have a limited language proficiency.
The resources are free to download and our booklets can be used by professionals as well as general public.
The booklet was officially launched on 29th November by the Lord Mayor.
Watch a short video about the booklet.
What is a loan shark?
A loan shark is a person that lends money in order to make a profit but without having the permission from the Financial Conduct Authority (FCA) to do so. As they aren’t regulated, they operate illegally. Therefore, they may not meet any of the industry standards set by the FCA.
A loan shark can be anybody. They can be people you know or someone you might have met in a local pub, café or park. As bank interest rates have sharply increased, more people might be tempted to find a good loan online. Beware, loan sharks can approach you on the Internet, via Apps and on social media, too!
They often lure people in with false promises and a seemingly safe place to got to for help. Their interest rates can vary and can typically between 100% to 400% a week. They usually make you pay back a lot more than you borrowed.
How to Spot a Loan Shark?
Look for the following:
- Offered a loan in cash – This means there’s no evidence they have lent you any money.
- No paperwork or lack of paperwork – They will not write down what you owe them.
- Lack of information about the loan, such as interest rates and repayment terms – They will not tell you how much you will have to pay back.
- Lending without credit checks – If your credit score is low, your loan options from banks will be limited. Loan sharks will pretend they want to help you, but their intention is to charge high interests in short-term.
- Your loan never gets paid off – They will keep collecting the loan week after week, month, after month and year after year.
- If someone you recently met offers to lend you money – They often appear to be very friendly and trustworthy and offer to help you to get through difficult times.
- Threads of violence or as asks you to do something illegal – If you cannot pay them, they may turn from being very friendly to being angry. Sometimes they might ask you to do things you do not want to do, such as stealing things or dealing drugs.
Have you borrowed money from the loan shark?
If you have done so, you are not in trouble. They are the people that are breaking the low, not you.
Speaking to someone about your situation is the best thing to do.
You can report what has happen to you without giving them your name or phone number.
In England, you can report loan sharks to the Stop Loan Sharks team by calling 0300 55 222, using their webchat, or text to 6003.
What Information can you give to them?
- The loan shark name or nickname
- Where they live
- How much you borrowed, how much you pay them and how you pay them
- What car they drive
- Where you meet them
- When they come
- Describe how they look