Taking a bite out of loan sharks

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Shark attacking

Are you being stalked by a loan shark?

After many years of working in a debt charity, it takes a lot to shock me these days. But what I heard that day made my blood run cold.

“I’m scared, I can’t answer my door, I can’t go out, I can’t stop crying…”

Ann had phoned us for debt advice. She was at breaking point.

“I need help but where do I go? Who do I turn to?”

She was buckling under the pressure and intimidation she was dealing with from what she said was one particular creditor.

“They’re knocking on my door constantly and their threats make me feel even more trapped. My children can’t even go to school because I’m too scared that something will happen to them.”

I was completely confused; creditors don’t do this. What was going on?

Then I realised: Ann was a victim of a loan shark, and their campaign of terror against this poor woman and her family was nothing short of cruel.

Coping with a debt problem can often leave people feeling like a trapped animal. To suffer the bite of a loan shark however is something else entirely.

We hear about loan sharks regularly in the news, but it’s not always easy to tell a loan shark from other types of lenders. It’s harder still to know what your rights are, and what you can do should you owe a loan shark money. How do you deal with threats or intimidation on the scale I’d heard over the phone that day? 

What is a loan shark?

Loan sharks are illegal money lenders operating without authorisation from the Financial Conduct Authority (FCA). By lending without a licence they’re committing a serious criminal offence, and should be avoided at all costs. 

Loan sharks often charge an extremely high rate of interest, and use intimidation or threats of violence to pressure their ‘customers’ into paying up. They usually target struggling families; the unemployed, single mothers, or people with limited ways of obtaining money when they need it.

Why are loan sharks a bad idea?

Aside from being dangerous, loan sharks can be very cunning, knowing exactly what to say in order to win a person’s trust. They can seem friendly and charming at first, often introducing themselves as ‘a friend of a friend’ who heard you were struggling. They can be hazy with the details, glossing over things such as the interest they’ll expect or the lack of paperwork they’re carrying.

It can be tempting to fall for a loan shark’s Good Samaritan act, but don’t. That charm will disappear overnight.

The facts about loan sharks

  • An illegal loan is unenforceable. All lenders need to be authorised by the FCA for their loans to be legal. This is of little comfort when a loan shark stops at nothing to get their money though.
  • A loan shark is not your friend. No friend makes unreasonable demands, threats or uses intimidation to get money from you.  No matter how long you have known them, and even if they’re helping you through tough times, they’re predators seeking out vulnerable people.
  • You’re not committing an offence by not paying a loan shark back. It’s the loan shark who’s behaving illegally by giving you the loan in the first place. You won’t get into trouble if you report the loan shark to the authorities.

I might be borrowing from a loan shark – what can I do?

First, you need to know for sure that you are dealing with an illegal money lender. You can check if this person is legitimate by running their name and trading address through the interim permissions consumer credit register. This will tell you if this person holds a current consumer credit licence.

If it turns out that this person doesn’t have a licence we strongly recommend you contact the Illegal Money Lending Team for confidential help and advice. The police and trading standards will also prosecute anyone found to be lending money illegally.

And I practice what I preach. After she told me what was happening to her, I referred Ann to the Stop Loan Sharks team. And they were brilliant.

With their help, the issue has been issue resolved and she can now do something that seems so commonplace to the rest of us – she’s able to leave her home and take the kids to school without worrying.

We have changed the client’s name to protect her anonymity.


I've been working for StepChange Debt Charity as a debt advisor for the past seven years. I love doing my job and love talking to people. I am going to be honest - I hate budgeting but I do it because if I didn't I wouldn't have any money at the end of the month! Working for StepChange Debt Charity has helped me in many ways and I want to share my experiences and knowledge with other people.

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