How To Avoid Loan Sharks This Summer

With illegal lending on the rise in the UK, it’s more important than ever to understand the signs of a loan shark and how to protect yourself. That’s why we’ve teamed up with our friends at Stop Loan Sharks to shed light on this dangerous and unregulated form of lending, including what to do if you think you've been targeted by a loan shark... 

Summer is finally here and with it comes long days, family days out, holidays, picnics and much more – so long as the weather plays ball! 

The downside is that things like childcare, transport, extra food, entrance fees and the looming pressure of buying the kids' back-to-school necessities all adds up to what can be an extremely expensive few months. 

Some people may find themselves needing to borrow money at this time of year to cover all those extra costs. Loan sharks know this only too well and can use the summer as a time to target people when they are financially vulnerable. 

You may find yourself approached by someone in your community with an offer of a small loan to cover those extra expenses. They may appear to be a friendly face, and just happen to appear just when you’re feeling the pinch. 

But instead of freeing you up to enjoy the summer, taking that offer could plunge you into the nightmare world of loan sharks, trapping you in a cycle of never-ending debt and misery. 

So, how can you be sure your lender is not a loan shark?  

The first thing you should do is check that your lender is registered with the Financial Conduct Authority (FCA). If they are, they’re legally allowed to lend money; if they’re not, and they lend and charge interest, they are acting illegally and are not bound by the FCA’s rules that are there to protect borrowers. 

There are also a few red flags to look out for: 

• Are you being asked to pay back high rates of interest? 

• Got no paperwork or documentation regarding the loan? You should have a contract signed by you and the lender 

• Are you afraid of what your lender might do if you don’t make the repayments? 

• Is your lender intimidating you or making threats to make you pay? 

• Have they taken your bank card, passport, or other items as security? 

If the answer to any of these questions is yes, you may have been targeted by a loan shark and you should take action now. Experts such as Stop Loan Sharks, also known as the England Illegal Money Lending Team, can help. 

Its team of experienced staff can help people escape the clutches of an illegal lender and start the journey back to financial safety. 

The IMLT was created 20 years ago and during this time has worked to tackle illegal money lending across the country, investigating and prosecuting illegal lenders and supporting borrowers. 

Since the launch of the team in 2004, Stop Loan Sharks has supported over 31,500 people, written off over £91.2 million worth of illegal debt and secured more than 420 prosecutions for illegal money lending, amounting to over 600 years in jail. 

Stop Loan Sharks statistics show that it can sometimes take borrowers at least two years to finally report a loan shark. 

There are many reasons for this – threats and fear of repercussions is one, but it can also be the fear of being exposed and shamed. 

Borrowers may be made to feel as though they have done something wrong and become fearful of their family or friends finding out. But they should feel no blame or shame as they haven’t actually done anything wrong at all. 

What’s happened is they’ve been targeted and exploited by a criminal – the loan shark – and it’s this unregulated lender who should carry all the blame and shame, not the borrower. 

Stop Loan Sharks’ officers recognise this, and they are there to help, not to judge. 

If you think you have been targeted by a loan shark, or you know someone who has, you can contact Stop Loan Sharks by calling the 24/7 confidential hotline 0300 555 2222 or joining the live chat which is available when you visit www.stoploansharks.co.uk from Monday to Friday, 9am to 5pm. 

For further information on the support available and how to get in touch, visit www.stoploansharks.co.uk 

This article has been written by Sally-Anne Youll, IMLT press officer. For media enquiries, please email Sally-Anne.Youll@birmingham.gov.uk or call 07840712850.