A loan shark lends money illegally, and can even rip you off if you are not careful.
By law, all lenders must:
1. Be licensed by the Office of Fair Trading.
2. Have correct procedures in place for the collection of money.
3. Provide you with the correct paperwork outlining all charges, including interest rates and your repayment schedule.
Loan sharks do not provide any of the above. Additionally, they may use intimidation tactics and threats of violence to extort money from you.
Loan Shark Facts
- May use harassment, violence, sexual assault and blackmail if repayments are missed
- Do not offer receipts for payments
- Often take benefit payments, cash cards and goods as security
- Lend to anyone (including under 18’s)
- Repayments of at least twice the original amount, often with high charges for defaulting
- Find clients by word of mouth, that is, through social networking, for example: shops, pub, school/college gates, taxi rank, council estates, etc.
- Often do not paying any tax on their income
- Usually involved in other criminal activities, which are funded by illegal money lending
Loan Sharks and Crime
Loan sharks can be involved in other criminal activities, such as:
- Counterfeit goods
- Guns and other weapons
- Prostitution and people trafficking
- Money laundering
Loan Shark Victims
The majority of the victims are unemployed females, who are on benefits and live in rented social housing. They usually have debts and will have tried to borrow elsewhere first, and have found the Loan Shark through a friend.
Illegal money-lending also has a knock on effect. Whole communities are affected when those who have taken loans from illegal lenders and are subsequently threatened into paying back many times more than they had originally borrowed. Also, loan sharks are often involved in other types of crime