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Loan shark debt. What to do if you owe an illegal money lender.

It's a criminal offence to lend money for profit without a consumer credit licence. A company or an individual who engages in unlicensed lending is commonly known as a loan shark.

Loan sharks often lend money alongside another legal or illegal business. The methods they use to lend out and collect money vary a lot. Some of the warning signs that a lender is acting illegally include:

  • Giving you no paperwork or agreement
  • Refusing to give you information about the loan
  • Keeping items until the debt is paid, such as your mobile phone or cash card
  • Taking things from you if you don't pay on time
  • Adding more interest or charges so the debt never goes down
  • Using intimidation or violence if you don't pay

Not all loan sharks act like this. Some may appear like legitimate businesses like a doorstep lender and you may be given a payment book or even an agreement to sign. But what they’re doing is still illegal, and they have no right to lend out money with a licence.

What can I do about a loan shark debt?

If you've borrowed money from a loan shark, the most important things to remember are:

  • You've not done anything illegal and you won't get in trouble with the police. It's illegal to lend money without a licence, but it' not illegal to borrow money from a loan shark
  • You don't have to pay the money back. If the money was lent illegally, the loan shark has no legal right to collect it and they can't take you to court to get it back
  • Don't stop paying a loan shark if you're worried about your safety. Get advice from a specialist before you make a decision

If you're worried about a loan shark, confidential help is available from specialist illegal money lending teams who investigate and prosecute illegal lenders.

Where can I get help?

Getting advice on loan sharks depends on where you live in the UK.  You can report a loan shark online or call one of the following teams:

  • England Illegal Money Lending Team – 0300 555 2222
  • Wales Illegal Money Lending Team – 0300 123 3311
  • Scotland Illegal Money Lending Team – 0141 2876 655
  • Northern Ireland Trading Standards Consumer Line – 0300 123 6262

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How can I tell if a company has a licence?

It's not always obvious if a creditor is lending money illegally, especially if they act like a normal business.

The Financial Conduct Authority (FCA) helpline can tell you if a business has a valid consumer credit licence. You can call them on 0800 111 6768.

If you have a payment book or agreement showing an address or licence number, have this handy when you call.

Sometimes a business may have a valid consumer credit licence which allows them to do other financial activities, but not to issue loans. They're still breaking the law if they lend or collect money.

We can help

If you've borrowed from a loan shark, we won't judge you and everything you tell us is confidential. Use our online debt advice tool or call us (freephone, including all mobiles). We'll help you create a personalised budget and give you a tailored solution to help you deal with your debts.

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Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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