Loan Sharks
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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.
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.
What to do if you owe money to a loan shark
In England, if you think a money lender is operating without being FCA authorised, you can speak in confidence to the Illegal Money Lending Hotline on 0300 555 2222. You can also email the Illegal Money Lending Team at reportaloanshark@stoploansharks.gov.uk or text loan shark and your message to 60003.
In Scotland, you can speak in confidence to the national Trading Standards Scotland team to report an illegal money lender on 0800 074 0878, or report it online to them at www.tsscot.co.uk.
The advisers can give you advice about your situation. The information you provide helps them to take action to stop illegal money lending.
You can find more information about loan sharks and reporting them on the GOV.UK website at www.gov.uk.
If you are in debt or you are thinking about borrowing from a loan shark, get advice first, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click nearest CAB.