There is an unfortunate, ongoing prevalence in Britain of people borrowing money from illegal money lenders or ‘loan sharks’, (who are often not licensed by the Financial Conduct Authority) to pay off bills or pay for food. These people take advantage of lower-income families and prey on the vulnerable in their time of greatest need. Recent statistics show that 310,000 households in the United Kingdom are borrowing from these people, with the highest interest rate ever recorded being 131,000% APR. These people are dangerous and should not be trusted for loans under any circumstances. Luckily, a new charity called Loan Smart has launched, which will help people to report these ‘loan sharks’ or check if they are recognised by the Financial Conduct Authority. This charity will to try to help consumers avoid illegal lenders and I would highly recommend it for anyone facing this unfortunate situation.
‘Loan sharks’ are defined as illegal lenders, i.e. people who lend money without a licence. These people might seem friendly at first, and willing to lend you money without a issue, but they are never a good idea. Once they gain control, they can take over your life and may try to force you to do illegal things in order to pay them off. They can affect families, children and communities with their abhorrent actions. There are a various ways of identifying if the person you are borrowing money from is an illegal ‘loan shark’: failure to produce sufficient paperwork; often increasing debt; involvement in crime and even forcing you into illegal activities.
However, if they try to intimidate you with the prospect of prison, do not take them on their word, you have not done anything illegal – they are the ones breaking the law. To report any ‘loan shark’ either call the Police on 101 or report it to the Illegal Lending team on 0300 555 222. Loan Smart will also help you to find out if your ‘loan shark’ is illegal and give you advice on what to do next.
People can often find themselves turning to ‘loan sharks’ in times of desperation when bills are overdue and they do not have a good enough credit score to obtain quick money from a legal source such as a bank. This is also mixed in with poor education on debt and debt solutions, which has been made worse by the recession and the ongoing impact that it is still having on the United Kingdom. There are, however, solutions such as money advice websites that you can go to, if you ever find yourself in such a situation.
Loan Smart – https://www.loansmart.org.uk/#about-loan-sharks
Bolton Council Money Skills Service- https://www.bolton.gov.uk/debt-money-advice-services/bolton-money-skills-service-including-furniture4u
Money Advice Service- https://www.moneyadviceservice.org.uk/en
Citizen’s Advice- https://www.citizensadvice.org.uk/debt-and-money/
Hoot Credit Union(Lend Money at Reasonable Rates)- https://www.wisewithmoney.org.uk/products-and-services/loan-products/