Borrowing money is not unusual and it can happen in a variety of different ways, everything from using credit cards and going into your overdraft to taking out personal loans, car finance agreements or a mortgage.
However, it’s essential that when you do borrow money that you do it from a reputable provider, one that’s authorised by the Financial Conduct Authority (FCA) to lend money legally.
Unfortunately, there are those who do lend illegally and who aren’t authorised by the FCA. These individuals are often referred to as loan sharks and they often charge incredibly high rates of interest, which makes it harder for people to get out of debt once they go down this route.
Illegal money lenders have also been known to take other illegal action in order to collect their debts, including taking any valuable possessions you may have or threatening you with violence if you don’t pay up.
It can be difficult to know if someone is operating illegally or not, but there are some warning signs to look out for that could help you steer well clear.
First of all, if you’re unsure, always check their credentials with the FCA (1), although remember that not all forms of lending need to have proper authorisation (such as informal loans between friends and family, which aren’t against the law).
When you are considering borrowing from a lender and aren’t sure whether they’re above board or not, ask yourself if they offered you a cash loan, if they refused to provide you with any paperwork, or if large amounts of interest were added to the loan.
If you answer yes to some or all of these questions, then it’s highly possible that you are dealing with a loan shark, in which case you could consider getting in touch with the Illegal Money Lending Team (2). This organisation is made up of specialist investigators and liaise officers to prosecute illegal money lenders and offer borrowers support.
With the cost of living crisis being what it is at the moment, it’s important to ensure that any borrowing – if deemed necessary – is done so from reputable sources. MoneyHelper has further information on borrowing from alternative sources, if you’re struggling to obtain credit from traditional lenders. .
If you believe you are in danger at the moment or are being threatened by a loan shark, you may want to consider going to the police. You will not get in trouble as you haven’t done anything wrong and it is the loan sharks themselves who are operating outside the law.
If you are struggling with debt at the moment because of cost of living challenges, get in touch with us today to find out more about your various debt solution options.
References:
1. https://register.fca.org.uk/s/
2. https://www.stoploansharks.co.uk/who-we-are/
