Beware – loan sharks come in all shapes and sizes!

The country’s oldest loan shark was spared jail this week having been caught illegally lending more than £120,000 and threatening vulnerable customers if they struggled to repay their debts.

Tabitha Richardson - a 83-year-old great-grandmother who was described as ‘threatening and menacing in Court – was charging 40% interest on six-month loans to hard-up neighbours.

When people missed payments, Richardson sent messages saying: “You know I can find you.”

One victim borrowed £31,000 and paid interest in the region of £12,400, while another took out a loan for £46,300 and was made to paid back a total £64,900.

Richardson was sentenced to two years in prison - suspended for two - at Cardiff Crown Court.

What are loan sharks?

A loan shark is an unlicenced and unauthorised moneylender who usually targets low-income families needing money in a hurry or who struggle to access money from legal sources, such as banks.

What are the risks of borrowing from a loan shark?

There are many risks associated with borrowing from a loan shark, some of the most common are:

• You’ll pay much more interest when borrowing from a loan shark than you would through any legal lender. Therefore, any loan you take out will be much more expensive in the long-term.
• You might be pressured into borrowing more money to repay one loan with another and end up in a spiral of debt that you can’t get out of.
• You might be chased, harassed, or threated both verbally and physically if you miss repayments.

How can you spot a loan shark?

As with Tabitha Richardson’s case, loan sharks come in all shapes and sizes and can be hiding in plain sight.

If you have any doubt, check a lender out before you take a loan. Anyone lending money must be authorised by the Financial Conduct Authority (FCA). Visit www.register.fca.org.uk/s/ to make sure you’re dealing with a legal lender.

If a lender isn’t listed as having a current authorisation to lend money, don’t borrow from them and don’t let them come into your home.

Here’s some other signs to look out for that might suggest you’ve borrowed from a loan shark:

• No paperwork – paperwork leaves a trail and evidence so a loan shark will avoid it at all costs.
• Cash loans or bank transfers – loan sharks normally deal in cash. However, some are now using bank transfers as well.
• Refusing to give you information about the loan – most loan sharks will avoid giving details about your loan, such as the interest rate, details of payments or the total amount you owe.
• Taking possession for security – some loan sharks will take personal possession, such as passports or bank cards as security, to ensure their debt is repaid.
• You loan keeps growing – loan sharks might increase the debt or add extra charges even if you’re keeping up with repayments.
• Threats of violence – loan sharks often use intimidation and threats to scare people into paying back their loan. Some even use violence if loan payments are missed.

Have you broken the law using a loan shark?

If you’ve already borrowed form a loan shark, it’s important to remember you’ve NOT broken the law and there’s help available.

But the loan shark IS breaking the law.

As an unauthorised lender, they have no legal right to make you pay back the loan.  

Report a loan shark

If you believe someone is a loan shark, or have borrowed from a loan shark, contact the police on 999 if you’re in immediate danger.

Loan sharks never just go away so it’s important to seek help as soon as possible.

You can also report a loan shark anonymously to the Illegal Money Lending Team either online - www.stoploansharks.co.uk, by text 07860 022 116 or phone 0300 555 2222.