No blame, no shame – your lender is in the wrong, not you
A money lender must be authorised by the Financial Conduct Authority (FCA) to lend money legally. Money lenders who aren't authorised by the FCA are breaking the law. They are known as loan sharks.
Loan sharks are expert manipulators. It is often how they persuade people to borrow from them in the first place and later it's how they keep people trapped in a cycle of debt.
They will pretend to be a borrower's friend and appear to be offering a favour, turning up with a promise of cash just at the point when the borrower needs it most.
But instead of finding the expected relief from their financial struggles, borrowers find themselves plunged further and further into debt and feel trapped with no way out.
In order to maintain control of the borrower, the lender can use a variety of tactics – sometimes it is violence, or threats of violence, but often it is intimidation and the fear that the borrower will be exposed and shamed.
Breaking the cycle and asking for help
Borrowers are 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 have done nothing wrong.
This year is the 20th anniversary of Stop Loan Sharks. Over the past two decades, the campaign has supported over 31,500 people, written off over £91.2 million worth of illegal debt and secured over 416 prosecutions for illegal money lending, leading to 598 years in jail.
Signs of danger
The signs of an illegal lender include being:
- given no paperwork or details about a loan
- told to make repayments that add up to much more than you initially borrowed
- intimidated or threatened if you struggle to pay
- told to hand over items like bank cards or a passport until you can pay
If someone does need to borrow, there are authorised options available, credit unions, for example, offer a safe alternative to the mainstream banks and lenders.
Taking Action
If you think you have been targeted by a loan shark, you can contact Stop Loan Sharks by calling the 24/7 confidential hotline 0300 555 2222 or joining the live chat which is available on the Stop Loan Sharks website from Monday to Friday 9am to 5pm.
Sign up for the regular Trading Standards e-newsletter, full of information on how to avoid scams and up to date product recalls.
