What are loan sharks and how do they operate?

Unlicensed lenders - often called 'loan sharks' - operate illegal money lending businesses without a licence from the Office of Fair Trading. Here are some clues for identifying them:

  • Rarely offers paperwork to keep borrowers unsure of how much they owe
  • Charge extortionate rates of interest (rates of 131,000% APR have been seen)
  • Add additional amounts to the debt so borrowers struggle to repay
  • Take items such as passports of bank cards as security
  • Employ extreme methods to reclaim their debts, including violence and intimidation

Source: England Illegal Money Lending Team