A
loan shark – or illegal money lender - is someone who lends money illegally
without proper authorisation from the Financial Conduct Authority (FCA).
That
means if you borrow from them, they don’t have to follow the rules – they can
decide how much you pay back and when.
These
criminals are not always easy to spot - they can be a friend, a fellow service
member, even a senior officer.
Whoever they are, they will usually appear as a friendly face, offering you a favour. They may tell you that what they are offering is nothing more than peer-to-peer lending and their offer may seem hard to resist.
But
very quickly the situation can spiral out of control, and you could find
yourself having to pay back much more than you initially borrowed. You might
even be subjected to threats, violence and intimidation if you struggle to make
a payment.
There
are some signs that you can look out for, which may indicate that an agreement
has crossed the line from peer-to-peer lending into more sinister and dangerous
territory.
They
include:
-
being given no
paperwork upon the agreement of a loan
- being given no detailed information
about a loan
- having items such as a bank card or
passport taken from you until the debt is paid
- being threatened or intimidated you
if you do not pay on time
- being told to pay back much more
than you initially borrowed – some lenders use the term ‘double bubble’, where the
original loan amount is doubled
- being one of a number of people who
are in debt to one lender
If
you think you may have borrowed from a loan shark, it’s important to remember
that you have not broken the law, and we will not judge. You should feel no
blame or shame – the lender is committing a crime, not you.
The
England Illegal Money Lending Team (IMLT), also known as Stop Loan Sharks, is a
dedicated team of specialists that are leading the fight against loan sharks
across the country.
Set
up 20 years ago, the team has helped thousands of people escape the clutches of
these criminals and wiped out more than £91.6 million worth of illegal debt.
CASE STUDY: The people helped by the IMLT have included military
personnel. One of them was Kevin*
Kevin was a young soldier who borrowed from a fellow
soldier he thought was his mate. He
borrowed £400, but he ended up paying back £4,000. Kevin had other debts
including three payday loans and he borrowed the money from his so-called
friend to pay these loans back. His friend gave him no paperwork.
One of Kevin’s main concerns was that he might get
thrown out of the Army as he had been led to believe that the Army frowned on
soldiers that were in debt. In this case
the Army was sensitive towards his plight and moved him to a different barracks
to get away from the loan shark. Kevin said he was much happier in his new
barracks.
The soldier he had borrowed from was found to have
set up an unauthorised lending business
charging 40% interest to junior soldiers and threatening them if they failed to
pay him back.
When
Kevin realised something was wrong, he contacted the Stop Loan Sharks team in
confidence and told them about his fears. He was assured that he had done
nothing wrong, and a subsequent IMLT investigation meant his lender was
successfully prosecuted.
*Kevin’s
name has been changed
The Stop Loan Sharks team is committed to investigating reports of illegal lending and prosecuting those responsible. Over the past 20 years, it has successfully prosecuted more than 427 illegal lenders, leading to jail terms of 609 years.
They can offer confidential, expert help and advice, helping you escape the clutches of the loan shark and directing you towards safer ways of borrowing, such as credit unions or CDFIs (Community Development Finance Institutions).
There is a credit union service specially for military personnel who may have limited access to mainstream financial services.
Joining Forces, made up of three of the UK’s leading Credit Unions, Plane Saver, Serve & Protect and London Mutual, provides loans for Service personnel, with repayments taken straight from their pay. It was launched under the Armed Forces Covenant.
If you or someone you know is affected by illegal money lending, contact Stop Loan Sharks for support and advice without delay.
There is a 24/7 hotline available on 0300 555 2222 and a Live Chat facility is available on the website stoploansharks.co.uk between 9am and 5pm, Monday to Friday. All calls are treated in absolute confidence.
For further information, advice and more ways to get in touch, visit stoploansharks.co.uk
To find out more about Joining Forces go to joiningforcescu.co.uk
For those in Wales, the link is: Home - Stop Loan Sharks Wales : Stop Loan Sharks Wales
If you are in Northern Ireland, please contact the England Stop Loan Sharks team, and the NI Police POC will be provided.