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Loan Sharks

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Are you desperate for some cash? Christmas is fast approaching and you’ve no presents for the kids? Don’t fall into the trap of borrowing from loan sharks! One of the main dangers of lending money these days is that you will end up owing money to a loan shark. They aren’t always easy to spot and once you owe them money they resort to various intimidating methods of getting their money back. The question is how can you spot a loan shark?

Understanding loan sharks

Loan sharks are basically lenders who aren’t licensed. They prey on the vulnerable and don’t care about the people they lend money to. The Office of Fair Trading requires all lenders to have a license and if they don’t, they are breaking the law. The key factor that separates loan sharks from licensed lenders is that they offer ridiculously high interest rates. They know they can get away with offering extortionate rates because the people they help are desperate. If you’ve been turned down for a loan and you really need cash, it can be tempting to go with a lender who asks no questions. They won’t even give you much paperwork because as they aren’t a legal lender, they don’t need paperwork. It’s usually just a show to make people feel more secure and to make it look legitimate.loan sharks If you miss a repayment, the loan shark gets nasty and produces the ‘contract’ you signed. What people don’t realise is that this contract isn’t legally binding. If the case were taken to court it would more likely be the loan shark who gets into trouble, not you. Unfortunately people do get intimidated and they end up paying extortionate interest rates.

Threats of violence

The most worrying thing about loan sharks is they will resort to threatening you if you fail to make a repayment. Threats of violence aren’t uncommon, but you need to realise that no lender is allowed to threaten you. If you are ever threatened by a lender, contact the police immediately. There’s also an Illegal Money Lending Hotline, so if you think that the lender you are dealing with is unlicensed, you can contact them.

England: [email protected] / 0300 555 2222
Wales: [email protected] / 0300 123 3311
Scotland: [email protected] / 0141 2876 655
N. Ireland: www.consumerline.org / 0300 123 6262

The government is keen to stop illegal money lending and will do everything they can to help you. It can be intimidating reporting loan sharks but that’s what they want. They want to scare you so you don’t go to the police because they know if you do their whole money lending scam will be uncovered.

Checking for proper licenses

It’s recommended that you check a lender is licensed before you borrow from them. The Consumer Credit Register has details of all licensed lenders. You can find this register on the Office of Fair Trading website.

Getting the right help

You need to know that when you borrow money from a loan shark, you won’t be the one who gets into trouble with the law. Many people are scared to report the problem because they think they have done something wrong. The only people who will be punished will be the loan shark. As well as the Illegal Money Lending Hotline, there’s also the Citizen’s Advice Bureau. They are there to help with any problem you may have. If you’re worried about who to contact and where to turn, they will step in and help. They can even contact the police for you and stop the loan shark bothering you again. Don’t suffer in silence. If you’re being threatened or you suspect you are dealing with a loan shark, contact the police.

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About Jemma Porter

About Jemma Porter

Jemma Porter is an experienced content creator who has written for a number of online publications. A self-confessed penny pincher; she's often found seeking out the best personal finance deals.

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