In technical terms, a Loan Shark is someone who lends money outside of the legal and regulated government bodies. The FCA/Financial Conduct Authority is the regulator in the UK for all things credit and lending.

A company must jump through the FCA’s hoops, and be in compliance with their rules and regulations in order to be licensed to grant credit. Loan Sharks do not have that license or are regulated. So in essence, Loan Sharks do what they want. They lend to whom they choose to lend money to, charge whatever interest rates they decide to charge, and in the simplest terms, are illegal.

However, if someone has bad credit, is not knowledgeable about alternate means of borrowing, or falls prey, they may use a Loan Shark to borrow money.

As Loan Sharks are illegal, if you we money to one, their collection methods can be illegal as well.

Since there is no formal contract/agreement or terms and conditions of the loan, the Loan Shark can change the terms of the loan, and someone who borrows money, may find themselves in perpetual debt.

Collection methods of Loan Sharks can vary from threats or acts of violence, to demanding sex, or having the person in debt act as a sex worker to earn money to pay the loan back.

So what can you do if you find yourself in debt to a Loan Shark?

The obvious is to spot the signs that someone is a Loan Shark and avoid borrowing from them.

Since Loan Sharks operate illegally, you can report them to the Illegal Money Lending Team, either by phoning them at 0300 555 2222, or email them at

Calls and emails are treated in confidence.

More information can be found here.

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