Posted 05/11/2021

How to stay clear of loan sharks in the run up to Christmas

Swan Housing Association has teamed up with the England Illegal Money Lending Team (IMLT) to help protect residents from loan sharks and make communities safer. 

Loan sharks prey on people at their most vulnerable. Borrowing from a loan shark can seem like an easy option but often it will lead to a vicious cycle of threats, intimidation and spiralling debts.

We know times are very challenging at the moment, and with Christmas right around the corner, you may need some extra cash to tide you over; but be careful where you get it from. Illegal money lenders, or ‘loan sharks’, come in many different guises. They could be a regular from the local pub, a parent in the school playground or a friend of a friend. The criminals lend money illegally, give no paperwork on the loans and charge huge interest rates, creating an ever-growing amount of debt that is impossible to pay back.

Here are some of the warning signs to watch out for that a lender is acting illegally:

  • Giving you no paperwork or agreement on a loan
  • Refusing to give you information about the loan
  • Keeping items such as your passport and bank card until the debt is paid
  • 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
  • Starting off by being your friend but quickly turning nasty

If you have borrowed money from a loan shark, it is important to remember that you have done nothing wrong and there is no shame in seeking help.

It may seem like a difficult step to take, but there is support available from the England Illegal Money Lending Team.

During the pandemic, loan sharks moved their activities online, using social media adverts and messages to prey on those who are most vulnerable. Although loans from these illegal lenders may appear to be a quick solution in a desperate situation, they can end up costing much more than a legal loan and lead to threats and harassment.

One in ten people reported that they were targeted by loan sharks on social media in 2020.

Here are some useful tips on how you can stay safe from loan sharks online.

Know who you’re dealing with

If you’ve only ever met someone online or are unsure of the legitimacy of a lender, take some time to do a bit more research.

Check the lender is authorised by the Financial Conduct Authority (FCA). If not, do not borrow from them – report to the Stop Loan Sharks team.

Beware of loan adverts with no credit checks

Loan sharks have been known to advertise in community groups and on local selling pages. They may seem friendly and accommodating, but their behaviour can quickly change, and you might be harassed or threatened if you get behind with your repayments.

Lenders must carry out credit checks to make sure borrowers can afford to pay back their loans. You should never hand over your bank details to strangers, even if they lure you with attractive offers. Remember, if it looks too good to be true, it probably is.

Beware of any requests for your details or money

Loan sharks may ask for copies of your passport or pictures of your house, or address details such as your street and your house number. Never send money or give card details, online account details or copies of personal documents to anyone you don’t know or trust.

If you have been affected by illegal money lending, please call the Stop Loan Sharks Helpline on 0300 555 2222. Confidential support and advice is available to victims and concerned family members or friends, 24 hours a day.

Credit unions are a safe and legal alternative, find out more about the services on offer locally by going to

It's easy to check that a lender is authorised before considering a loan by visiting the Financial Services Register online at

If residents know of or have borrowed money from an illegal lender, they can report them in confidence at Live Chat is available on the website from 9am to 5pm, Monday to Friday.