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Loan sharks feel the heat

Loan sharks feel the heat

Category: Loans

Updated: 27/08/2010
First Published: 24/05/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Loan sharks will be feeling the heat today, after the Office of Fair Trading (OFT) stepped up a campaign to warn people of the dangers of borrowing from illegal money lenders.

Around 200,000 leaflets and posters are being distributed throughout England, Scotland and Wales urging people to report loan sharks, who typically charge exorbitant rates of interest and use violence and threats to enforce debts.

An estimated 165,000 households in the UK are thought to use illegal money lenders, with half of these in the most deprived areas of the country.

Particular loan shark hotspots include Scotland, the North of England and the West Midlands.

The OFT has stressed that anyone lending money should have a consumer credit licence from itself.

Licensed lenders have to comply with legal obligations in dealing with customers, including the use of proper paperwork and fair collection methods.

Unlicensed loan sharks will often offer cash loans without paperwork, they may take benefit or bank cards as security, and threaten or use violence to get money.

High street lenders that you know and trust, such as A & L's Loans, Barclays Loan, Nationwide Loans, or Sainsbury's Finance Loans should always be your first port of call when looking to borrow money.

"If you've borrowed money from a loan shark, you haven't broken the law, they have," said Ray Watson, director of the OFT's Consumer Credit Group.

"Loan sharks cause misery to thousands of families and should be stopped. If you have information about loan sharks, report it to the Illegal Money Lending hotline."

Loan sharks can be reported by calling 0300 555 2222, texting 'loan shark' and the details to 60003 or sending an email to reportaloanshark@stoploansharks.gov.uk.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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