What can I do if I have borrowed money from a loan shark?

All lenders have to be authorised by the Financial Conduct Authority (FCA) to lend money. It is illegal for a person or company to lend you money if they are not authorised by the FCA.   

You can search the Financial Services Register for companies and individuals authorised by the FCA. If someone has offered to lend you money, you can use this register to check they are registered. You can search the register by clicking on this web link: https://register.fca.org.uk/s.  

A person who is not authorised to lend money is known as a ‘loan shark’.  

Loan sharks often charge very high interest rates, so people find it difficult to pay the money back. 

Not all lending needs to be authorised by the FCA. Informal loans between friends and family aren’t against the law. However, even if they are friends or family, they cannot do anything illegal to collect money from you, such as threaten or harass you.  

If you can answer yes to one or more of these questions, you might be borrowing from a loan shark. 

• Did they offer you a cash loan? 
• Did they not give you paperwork? 
• Did they add huge amounts of interest or APR to your loan? 
• Have they threatened you? 
• Are you scared of people finding out? 
• Have they taken your bank card, benefit card, passport, watch, or other valuables from you? 

If you think or know that you or someone else has borrowed money from a loan shark, you can get help.  

In Wales, you can report concerns about a money lender to the Wales Illegal Money Lending Unit which operates a 24-hour confidential helpline on: 0300 123 33 11. 

You can contact them: 

• to get advice from them, 
• to report loan sharks to them so they can take action. They have the power to investigate and prosecute loan sharks, and, 
• to report a loan shark anonymously if you want to. 

If you have borrowed money from a loan shark, you have not broken the law. You don’t have to pay loan sharks back. But some loan sharks can be intimidating or threaten violence. It is best to contact the Wales Illegal Money Lending Unit as soon as you can. They can help you stay safe while they investigate the loan shark.  

For any loan shark issues please contact the Wales Illegal Money Lending Unit first and not the police. The police have no power to prosecute loan sharks. The police might get involved if a loan shark has committed other crimes like assault, but it is best to contact the Wales Illegal Money Lending Unit first.  

You can read more about loan sharks on the Money Helper website.