Loan Sharks and Illegal Lenders

Help! I've Borrowed From A Loan Shark

What is a loan shark?

The definition of a loan shark is an unlicensed and therefore illegal money lender. Typically they target vunerable consumers who are unable to access credit by conventional means. As they operate outside of the law, often they:

Beware, cash loans - to your doorstep normally come with a massive interest charge.

• Offer cash only loans directly to the borrower's doorstep.
• Demand an extortionate interest rate.
• Harass clients who fall behind with repayments.
• Pressure clients into borrowing more so to be forever in debt  to them.

Loan sharks are not to be confused with legitimate doorstep or pay-day lenders such as Provident or Shopacheck who can provide a useful service. These lenders charge a high APR (annual percentage rate), so such borrowing should only be considering as an emergency short term (weeks rather than years) measure where other credit options are not available.

Once people find themselves indebted to a loan shark - it can be very hard to escape.

Is my lender a loan shark?

If you don't have a written credit agreement, almost certainly you are dealing with an illegal lender. All legitimate lenders need a CCL (Consumer Credit Licence) issued by the OFT (Office of Fair Trading). If you have a written agreement, look for the CCL (Consumer Credit Licence) number and a trading name. No CCL means loan shark.

If there is a CCL, then you can check it's validity by calling the OFT on 020 7111 9608 or you can check a CCL online. This will also tell you if the CCL has expired or been withdrawn.

What to do if you've borrowed from a loan shark

You are under no legal obligation to repay a debt from an illegal lender. Our advice is to pay back the original sum borrowed with a reasonable amount of interest and to advise the illegal lender you've taken legal advice over the matter. They can't use the courts to enforce payment.

You can confidentially report a loan shark and get advice on how to deal with them by contacting the Government's Illegal Money Lending Teams on the following phone numbers.

• Central England (West Midlands), South East, North West, Yorkshire and Humber and East Anglia 030 0555 2222
• North East 01642 232 940
• South West 030 0123 4247
• London 020 7364 6886
• East Midlands 01158 810 351
• Wales 03001 233 311
• Scotland 01412 876 655

The above can offer support and may be able meet with you (at a safe venue) to discuss what remedies are available. If you are threatened by a loan shark (or a legitimate lender for that matter) - call the police.

How Harrington Brooks Can Help

While we are not able to help negotiations with illegal lenders, if you are dealing with them, then it is likely you have other creditors chasing you for payment. We can help you deal with these by negotiating affordable payments. This allows you to regain a level of control over your finances and reduce the need for emergency borrowing.