Archive Website of the UK government

What is a loan shark?

Report a loan shark in England

If you need to report a loan shark in confidence:

• phone 0300 555 2222
• text LOAN SHARK and your details to 60003

• email the Stop Loan Sharks team Opens new window

A loan shark is an unlicensed moneylender. Licensed moneylenders are regulated by the Office of Fair Trading (OFT) and must follow the OFT's codes of practice.

Because they're not licensed, loan sharks operate outside the law. If you borrow from them it's likely you'll:

• get a loan on very bad terms
• pay an extortionate rate of interest (rates as high as 131,000 per cent APR have been recorded)
• be harassed if you get behind with your repayments
• be pressured into borrowing more from them to repay one debt with another

If you have borrowed from an illegal money lender, you haven't committed a crime - they have, and they could receive a prison sentence.

How to spot a loan shark

Loan sharks will often:

• start out being friendly - their behaviour only changes when repayments are missed
• offer little or no paperwork
• increase the debt or add additional amounts
• refuse to give the borrower vital information, such as the interest rate or how much they still owe
• take items as security - for example, passports, bank cards or driving licences
• resort to intimidation, threats or violence

How to find out if a lender is licensed

The Consumer Credit Public Register lists everyone with an OFT licence. It also lists everyone who has applied for one or has had one taken away or suspended.

You can get basic information from the register free of charge, including trading names and the activities for which a business is licensed.

To search the public register, telephone 020 7211 8608 between 9.30 am and 4.00 pm Monday to Friday or do an online search using the link below.

If a lender isn't listed as having a current licence, don't borrow money from them.

• Check the register to see if a lender is licensed Opens new window

What to do if you have borrowed from a loan shark

Social media and Stop Loan Sharks

See what the Stop Loan Sharks team are up to on Twitter and Facebook

• Visit the Stop Loan Sharks Facebook page Opens new window

• Follow the Stop Loan Sharks team on Twitter Opens new window

Loan sharks sometimes frighten people by saying they'll be prosecuted and even sent to prison if they don't pay up. This can't happen – an unlicensed lender has no legal right to recover the debt. If you have borrowed money from a loan shark, there's no legal obligation for you to pay them back.

You can report a loan shark in confidence to an Illegal Money Lending Team.

If you live in England

• call 0300 555 2222
• text LOAN SHARK and the details you want to pass on to 60003
• send an email to reportaloanshark@stoploansharks.gov.uk

If you live in Wales

• call 0300 123 3311
• send an email to imlu@cardiff.gov.uk

If you live in Scotland

• call 0141 2876 655
• send an email to loansharks@glasgow.gov.uk

• Visit the Stop Loan Sharks Facebook page Opens new window

• Follow the Stop Loan Sharks team on Twitter Opens new window

What to do if you're being harassed

Any lender - licensed or unlicensed - who harasses you is breaking the law. You should report any loan shark to the appropriate Illegal Money Lending team and contact the police if you are in immediate danger.

Other ways of borrowing money

If you need a loan, always go to a licensed lender. There are reputable lenders who'll consider lending to you even if your income's low, your credit rating's poor or you only need a small amount for a short while. You may still have to pay a high rate of interest but the Consumer Credit Act will cover your loan agreement.

Always shop around for credit though - just because a lender is licensed it doesn't necessarily mean you are getting a good deal.

• Find out more about loans from the Money Advice Service Opens new window

If you're on a low income and you need to borrow a small amount for a short time, look into borrowing from a credit union. Credit unions encourage you to save what you can and only borrow what you can afford to pay back. You'll pay from one to two per cent in interest a month.

• Different ways of borrowing money

Where to get help and advice

Stop Loan Sharks on YouTube

Video case studies about people dealing with loan sharks

• Watch videos from the Stop Loan Sharks team on YouTube Opens new window

Many organisations offer free help and guidance on money matters. Always get free, independent help before you pay a commercial service.

Citizens Advice Bureau (CAB)

Your local CAB is a good starting point for free advice. They provide free information and advice on legal, financial and other problems. You can find your local CAB in the phone book or on the CAB website.

• Find your local CAB Opens new window

National Debtline

National Debtline offers free, confidential and independent help over the phone for people in England, Scotland and Wales.

You can call their helpline on 0808 8084 000 between 9.00 am and 9.00 pm from Monday to Friday and from 9.30 am to 1.00 pm on Saturdays (24 hour voicemail). You can also write to them.

• Contact details for National Debtline

• The cost of contacting 08 and 03 telephone numbers

The National Debtline website has some useful publications that you can download too.

• Free debt advice and information from National Debtline Opens new window

Consumer Credit Counselling Service (CCCS)

The CCCS has a helpline providing free and impartial advice to people with debt problems. You can call their helpline on 0800 1381 111 between 8.00 am and 8.00 pm from Monday to Friday. You can also write to them.

• Contact details for Consumer Credit Counselling Service

• Help and advice from the Consumer Credit Counselling Service Opens new window

More useful links

• Plan your way out of debt

• Financial problems and complaints

• Complain to the Office of Fair Trading about an unfair contract Opens new window

• Watch the 'Stop loan sharks' video on YouTube Opens new window

Useful contacts

• Money, tax and benefits contacts