Loan sharks are illegal moneylenders. Any moneylender in the UK must possess the appropriate license issued by the Office of Fair Trading. Unlicensed moneylenders normally operate through word of mouth and call door-to-door. They may seem perfectly nice until a repayment is missed. Then they can threaten or even carry out acts of violence if loan repayments are not made. Many people who are in the clutches of a loan shark feel trapped and desperate.
Loan sharks charge very high interest rates, often over 1000% APR, sometimes as much as a whopping 131,000%. They can also make arbitrary charges for missing a payment, or even double the debt. Many people do not report loan sharks because they are ashamed of having got themselves into a financial mess. But they have done nothing wrong. It is the loan shark who is acting illegally, and it is possible to get help to write off the spiraling debt.
How to spot a loan shark
A loan shark may well ask you to fill out an official looking form – but might forget to give you your own copy to keep. They may, according to the Office of Fair Trading, take bank cards or benefits as loan security. You probably won’t be provided with a proper repayment plan, you’ll just be told how much you have to repay per week. You may not be told exactly how many repayments you’ll have to make – there is no end in sight.
Loan sharks typically prey on people who may have debts, but will find it hard to get credit through other means. They may not own their own homes, or have regular employment. They do not lead so-called “chaotic lifestyles” but are simply struggling to make ends meet – and these are the sort of people who will be targeted by loan sharks.
How to get help to write off debt from a loan shark
Loan sharking is illegal. Since 2004, more than £45 million of illegal debt from loan sharks has been written off through legal action taken by the Trading Standards Illegal Money Lending Team. Illegal moneylenders can be jailed, and their money taken from them – the people they “lend” to are not the criminals; the loan sharks are.
To report an illegal loan shark, you can contact the Trading Standards Team at the website above. They have a 24 hour telephone hotline and you can also text or email your concerns – this will be completely confidential. You can report an illegal moneylender who is lending money to yourself or to someone you know.
Carol Highton, a campaigner for the Trading Standards Team, decided to act against moneylenders after her son Paul was driven to suicide at the age of 22 by an illegal loan shark. She says “Loan sharks are the scum of the earth, who prey on people who are vulnerable and desperate to get out of debt.”
How to get help to safely get out of debt without using a loan shark
If your debts are spiraling and you don’t know what to do, there are safe and regulated ways that you can be helped. A very good way to start is to go to your local Citizen’s Advice Bureau. Their website will show you where to find your local branch.
Another good way to get help is through contacting a debt management charity such as the Consumer Credit Counselling Service. They can support you and help you to draw up a financial plan and arrange repayments that you can afford. If your debts are too large for you to be able to repay, they can even be written off.
If you are in the clutches of a loan shark, you can report them and write off your illegal debt. If you are worried about your debts, contact one of the agencies above for a safe, controlled and supported plan to become debt free.