The trouble with loan sharks is that they don’t have big teeth. They can be friendly, and talk as if they are doing you a big favour. But they will make sure you never pay off the loan, and the rate of interest can be enormous.

They may not even keep you up to date on how much you owe. Or they may offer you a new loan to pay off the old one, so keeping you in their debt.

In the worst cases, they can become aggressive in seeking their money. And then their teeth start to show.

Loan sharks are unlicensed moneylenders who operate outside the law and without any financial regulation. They will often take your post office account card, or other valuable items as security against the money you have borrowed.

They may use threats and violence to frighten you if you can’t repay. Or they demand that you do illegal favours, such as growing cannabis.

The best defence against sharks is to budget carefully. Click here for our budgeting advice.

The next is to ask yourself how badly do I need this loan? Your local benefits office (DWP) can make emergency payments if necessary. Could a local charity or church that could help you? Don’t be too proud to ask.

Finally, make sure you see exactly how much you will have to repay before agreeing, even to a legal loan.

If you are in debt to a loan shark, don’t ignore the problem. If you are being threatened, go to the police. You can also report the loan shark anonymously to the Illegal Money Lending Team (see contacts, right).

Who else can I borrow money from?

• Always go to a licensed lender. Call the Consumer Credit Public Register on 020 7211 8608 to check.
• Shop around for the best deal
• If you’re on a low income and need to borrow a small amount for a short time, try to a credit union. In most cases you will already need to be a saver with the union before you can get a loan, but some will give the loan first. Call the Association of British Credit Unions on 0161 832 3694 to find one near you. See our Credit Unions page.
• If you want to know your consumer rights, see the CAB website.

What should I do if I owe a loan shark money?

• You don’t have to repay any money lent to you illegally.
• If you, or anyone you know, are being threatened, or believe you are in danger at the hands of a loan shark, you should immediately call the police.
• It is an offence for anyone to harass you in pursuit of an unpaid debt.

How to report them

Illegal Money Lending Team
England
reportaloanshark@stoploansharks.gov.uk
0300 555 2222
Available 24 hours
Text LOAN SHARK and the lender’s details to 60003

In Wales
Wales Illegal Money Lending Unit
imlu@cardiff.gov.uk
0300 123 3311
24 hours

In Scotland
Illegal Money Lending Team – Scotland
loansharks@glasgow.gov.uk
0141 2876 655

In Northern Ireland
Trading Standards Consumerline – Northern Ireland
www.consumerline.org
0300 123 6262