Don’t get bitten by the sharks!

Alongside a number of helpful services and schemes that go some way to assisting those needing financial help, there are also sadly some who exploit others’ hardships and prey upon their vulnerability.

At a time when people are looking for a cash boost to cover their bills, loan sharks may be on the lookout for their next victim.

What is a loan shark?

A loan shark is an illegal money lender. They offer money as a loan in an often enticing and appealing way, but then charge extremely high interest rates and may aggressively collect money or collateral back.

All money lenders need to be authorised by the Financial Conduct Authority (FCA) – this ensures that loans are offered in accordance with the law. Loan sharks will offer money without being authorised by the FCA, meaning that they act illegally and may use threatening tactics against the borrower.

Anyone can fall victim to loan sharks. Their offers can be tempting, and their approach may initially seem genuine. Brain injury survivors may be particularly vulnerable to such schemes if, for instance, they are impulsive or have cognitive effects of brain injury that interfere with their ability to make decisions.

How can I spot a loan shark?

Anyone lending money must be authorised by the Financial Conduct Authority (FCA).

If you are ever approached by someone offering to lend you money, always check whether they are registered with the FCA before entering into discussions with them. You can check the register here: www.register.fca.org.uk.

The government-approved service Money Helper has some useful information on how to spot loan sharks. Some of the signs they recommend looking out for include:

• No paperwork – having an official paperwork trail makes a business transaction more legitimate, and loan sharks avoid it at all costs.
• Cash loans or bank transfers – loan sharks normally prefer to deal in cash. However, more are now using bank transfers as well.
• Refusing to give you information about the loan – most loan sharks will avoid giving you clear details about your loan, such as the interest rate, details of previous repayments and the total amount you owe.
• Taking possessions for security – some loan sharks will take personal possessions, such as a passport or bank cards, to act as security.
• Your loan keeps on growing – loan sharks might increase the debt or add extra charges at any time, even if you’re making regular payments. It’s important you get help because the debt can spiral out of control very quickly. Find out more at www. stoploansharks.co.uk.
• Threats of violence – loan sharks often use intimidation and threats to frighten people into paying back their loan.

What to do if I am approached by a loan shark?

Loan sharks keep chasing people for money, and it is important to act to stop them. You should always report a loan shark. There are different ways to do this depending on where you live in the UK.

Guidance on how to report a loan shark is available at www.gov.uk/report-loanshark.

When you report the loan shark, the advisers can give you advice about your situation. The information you provide helps them to take action to stop illegal money lending. Anything you tell them will be strictly confidential and you can remain anonymous. The loan shark won’t know they’re being investigated.

If you have been approached by someone you suspect is a loan shark, and think you are in immediate danger, you should call the police on 999.

If you’ve already borrowed from a loan shark, you haven’t broken the law and you can get help. You shouldn’t try to handle the situation on your own. Remember as well that anyone can fall victim to a loan shark, and you shouldn’t feel embarrassed to ask for help.

It may help to talk to your situation through with a family member or friend. The Headway helpline can also offer emotional support and a listening ear. They are unable to offer advice on money issues, but they can often point you in the direction of other services that can help.