Introduction
Illegal money lending in the UK
Illegal money lending, often referred to as loan shark activity, remains a persistent and largely hidden form of financial harm across the UK. Individuals who borrow from illegal lenders are typically not doing so out of choice, but because they are experiencing acute financial pressure and either are unable to access safe, affordable credit through mainstream routes, or feel unable to do so.
Borrowers are often on low incomes, living with debt, have insecure immigration status, poor mental or physical health or other circumstances that restrict their access to regulated lending.
Illegal money lenders operate without authorisation from the Financial Conduct Authority so have no legal right to charge interest or recover debts and frequently rely on verbal agreements, cash transactions, and coercive control behaviour rather than formal contracts.
While experiences vary, illegal lending can result in escalating debt, threats, loss of property, emotional distress, and long‑term financial and psychological harm. Many people affected by illegal money lending do not recognise their lender as a “loan shark” and are reluctant to seek help due to shame, fear of consequences, or the belief that they have done something wrong.
The England Illegal Money Lending Team
The England Illegal Money Lending Team (IMLT) operates nationally under the banner “Stop Loan Sharks” and is responsible for tackling illegal money lending across England through investigation, enforcement, prevention, and victim support.
Established in 2004, the team investigates and prosecutes illegal money lenders, working closely with police forces, local authorities, and partner agencies. Alongside enforcement activity, the IMLT provides confidential, non‑judgemental support to people who have borrowed from loan sharks, helping them to feel safe, stabilise their circumstances, and understand that it is the lender – not the borrower – who is committing a crime.
The team also delivers awareness‑raising activity and training to frontline professionals and community organisations, recognising that early identification and trusted referrals are critical to preventing harm and encouraging disclosure.
Three Hands Insight
This report was produced in partnership with Three Hands Insight (www.threehandsinsight.co.uk), whose work centres on bringing the voices and expertise of people with lived experience into research, product design and decision‑making.
Three Hands supports organisations to better understand underserved customers and complex social issues by working directly with individuals whose lives are shaped by vulnerability, exclusion, and systemic barriers. Through a trauma‑informed and ethical approach, lived experience participants are enabled to share their stories safely, with dignity and control over how their experiences are used.
In the context of illegal money lending, this approach provides insight that cannot be obtained through quantitative data alone, revealing people’s understanding of their options, how trust in lenders is formed, and why harm often remains hidden until it becomes severe. The lived experience evidence in this report is intended to deepen understanding, challenge assumptions, and inform more effective, compassionate responses to illegal money lending.
It is notoriously difficult to get people who have borrowed from Loan Sharks to talk about their experiences. Every year the IMLT produce reports, stories and statistics about people they have supported – those who have engaged with the team and spoken to them.
However, very little is known of the hundreds of thousands of people who do not engage with the IMLT. Three Hands Insight worked with their Lived Expert Research Community (Lived Experts Research Community – Three Hands Insight) and identified seven people willing to speak anonymously about their experiences. Interviews were conducted in spring 2026. Of these seven, six interviewees agreed to have a summary of their story included in this report. Findings from the seventh have been included in the results and recommendations. People’s names and locations have been altered to protect their anonymity but their stories are true as told.
Summary of Lived Experience Interviews
Sue
Sue’s life changed dramatically after a rapid-onset progressive illness left her reliant on extensive assistive equipment and full‑time care. Once a senior professional, she and her husband lost financial stability when her illness forced her out of work and reduced his earning capacity as her primary carer.
When unexpected veterinary costs for her assistance dog coincided with the annual £1,400 insurance bill required to keep her essential medical equipment, Sue found herself with no viable options. Banks, credit unions, and mainstream lenders all refused her because she lives on disability benefits and has a debt relief order. Facing the risk of having vital pieces of assistance equipment removed, which were supplied by the local authority on the basis that she insured them herself, she felt trapped with no safe alternatives.
Eventually, through word of mouth, Sue borrowed £1,300 in cash from a local illegal money lender. She went to find him in a local pub and had to give a password so that he knew she had been “recommended” by someone who already borrowed from him. The loan had no paperwork and carried high interest, meaning she repaid nearly £2,000 over time, with £180 taken from her £280 fortnightly benefit.
Sue said the situation caused her a lot of anxiety, and she was worried that she had done something wrong by borrowing, which is not the case. Sue described the lender as respectful and flexible, and the loan brought immediate relief by allowing her to insure her equipment and remain independent.
She did not want to disappoint the lender so ensured that she made payments as required and said she would not report him as she would worry that what would replace him would involve higher interest, or even worse, that nothing would replace him and she would lose access to credit. She was grateful that the loan shark “took a chance” on lending her money when no one else would. Her story highlights how people in severe financial vulnerability can be pushed toward illegal lending not by recklessness, but by systemic gaps, rigid rules, and seeing no alternative.
Sofia
Sofia is a woman from South America living in the UK with her British husband and their children. Every two and a half years she must pay several thousand pounds to renew her visa, creating repeated financial pressure with strict deadlines. When her visa renewal was due and she had limited time and no savings, mainstream banks and credit cards would not lend to her despite her husband having stable employment. Wanting to avoid burdening her parents, Sofia accepted a loan of £3,000 from a man recommended by a friend within the diaspora community.
The loan quickly became exploitative. The lender initially charged £60-£90 weekly interest, which rose to £150 during the pandemic, and demanded repayments every week, mostly in cash. Despite these amounts being paid the original £3,000 remained outstanding.
Sofia and her husband struggled to keep up, accumulating more than £5,000 in interest alone. The lender took valuable gold jewellery as security and later threatened her husband by saying he would contact his workplace if payments were missed.
Eventually, Sofia’s family helped her repay the debt in full, but the lender disappeared without returning the jewellery. She believed that reporting could impact her visa status and DBS checks. The experience left Sofia distressed, financially damaged, and feeling like she couldn’t trust people in her own community which was particularly upsetting and isolating. This highlights how immigration costs, lack of access to fair credit, and community trust can leave people vulnerable to illegal money lending.
Andrew
Andrew lives in the UK and is neurodivergent, which makes managing finances particularly challenging. After falling behind on his water bills, he was hit with an unexpected demand of around £400. Unable to access a bank loan and unaware that the water company could offer a repayment plan, he borrowed money from an illegal lender who regularly operated in a local pub. The agreement was informal and verbal, with Andrew expecting to repay £80 a month over 12 months. However, the terms quickly became unclear and exploitative, with the lender demanding additional payments, taking Andrew’s personal belongings (his phone and his headphones) when he could not pay, and extending the debt well beyond the original timeframe.
The situation escalated over around 18 months, during which time the lender repeatedly threatened Andrew, publicly shamed him in the pub, and turned up at his workplace, contributing to him losing his job.
As his circumstances worsened, Andrew experienced housing instability, periods without a phone or internet, and reliance on food banks. He felt too ashamed and frightened to tell anyone or seek help, fearing retaliation and doubting that reporting would make things better. Eventually, he stopped paying and moved away to escape the situation, but the experience left lasting anxiety and highlighted how vulnerability, lack of clear information, and inaccessible support can trap people in harmful illegal lending arrangements.
Andrew, Sofia and Sue all said that they would have agreed to pay back any amount on the loan, because they needed the money. They considered the amount they would be paying back weekly/monthly and whether that was feasible, rather than the total amount to be paid, how long they would be paying, and whether that was exploitative. They talked of the things they had to sacrifice to ensure the loan was paid, and the impact on their sense of self and identity.
Michelle
Michelle’s experience with illegal money lending happened over ten years ago when she was a single mother, studying and working part‑time, and struggling financially. After confiding in a friend, she was introduced to a money lender and borrowed a small amount of cash, believing it would be manageable to repay weekly. Instead, the debt quickly escalated as interest increased and missed or partial payments were not accepted. The lender began turning up unannounced at her home, often at night, demanding payment. Michelle became fearful of being in her own house, hiding with her young child, turning off lights, and avoiding answering the door as the situation spiralled beyond her control.
Over time, the stress and shame became overwhelming, affecting her mental health. She felt unable to tell anyone or seek help, believing she would be judged or blamed for taking the loan in the first place. After around a year, Michelle finally told her family, and they paid off the debt, allowing her to escape the situation.
Although she is now in a much more stable place, the emotional impact remains vivid. At the time she felt embarrassed and ashamed and thought that if she had confided in anyone, they would have said that she had to pay it back. Michelle reflects that clearer information, early warnings, and practical alternatives could have helped her avoid illegal lending, and she now strongly urges others to seek support and explore safe options rather than turning to loan sharks.
Steve
Steve lives in the UK and is neurodivergent and has periods of poor mental health. He lives in social housing and was exploited by a neighbour during a difficult time in his life. The neighbour initially befriended him and offered financial help, reassuring Steve there was no pressure to repay. Over the course of one summer, Steve borrowed nearly £5,000, first in cash and later through bank transfers. He thought the neighbour was a friend. As the situation progressed, the lender’s behaviour changed: repayment demands became more frequent, the amounts increased, the neighbour said Steve had borrowed more than he had and began threatening to take his belongings. The situation escalated into cuckooing, with the lender attempting to take control of Steve’s home and possessions, leaving him feeling trapped and unsafe in his own property. Steve described feeling like a “cash cow” for the lender.
Eventually, the neighbour tried to break into Steve’s home, prompting him to contact the police, though he felt unsupported and chose to leave the property rather than pursue a lengthy legal process and have to face the lender in court.
He received meaningful help instead from a local charity and support from his family, which allowed him to rebuild his life in a safer home. Although the experience left Steve with lasting trauma, including anxiety, flashbacks and feelings of mistrust and wariness towards people, it also strengthened his determination to help others.
He now uses his lived experience to raise awareness of illegal money lending and cuckooing, particularly the risks faced by disabled and isolated people, and advocates for clearer, more accessible information and community‑based support to prevent similar exploitation.
Steve stated that the lender made himself seem indispensable in Steve’s life – a feeling that echoes things said by other participants in this research.
Suni
Suni is a single parent living in Scotland and has relied on informal money lending within her community to meet urgent needs when mainstream options were unavailable. She borrowed money twice: once to pay for an emergency flight to visit sick family and once to buy a fridge. In both cases, she was unable to access bank credit or Universal Credit advances due to perceived eligibility rules and existing deductions.
Through trusted community connections, she was introduced to a local lender and provided a friend to act as guarantor and ID. Suni described how, in some cases, small items of jewellery were taken by the lender as security. The loans were agreed informally, with repayments made monthly in cash, usually immediately after receiving Universal Credit.
Although the total amount repaid was significantly higher than what she borrowed – around £1,200 for £600 borrowed – Suni describes the experience as straightforward and reliable, with no threats or changes to the agreed terms. She viewed the lender’s role as providing essential emergency help rather than exploitation, reflecting similar practices she was familiar with in her home culture.
Suni acknowledged the risks if repayments were missed, including pressure on guarantors and the possibility of losing pledged items, but emphasised that her priority was maintaining trust and repaying on time, partly to ensure future lines of credit remained available to her.
She highlighted the stigma around borrowing, the lack of awareness of alternatives such as credit unions, and the need for accessible, immediate financial support delivered through trusted community spaces like schools, mosques, and local centres rather than online or formal institutions.
Cross‑Interview Analysis: Key Trends
1. Entry into illegal or informal lending is driven by crisis, not choice
Across all interviews, borrowing occurred at moments of acute pressure: housing insecurity, immigration deadlines, disability‑related costs, sudden bills, travel emergencies, or family obligations. Interviewees consistently described exhausting or discarding mainstream options first (banks, credit cards, Universal Credit, credit unions, employers, family) and turning to informal lenders only when all other routes were blocked, too slow or perceived as being not for them.
2. Trust is established through familiarity and social proximity
Lenders were almost always accessed through:
- Friends, neighbours, or community members
- Pubs, shops, churches, or community networks
- People perceived as “known”, “local”, or “helpful”
This created a false sense of safety, especially when the lender initially appeared flexible, friendly, or supportive.
3. Terms are interchangeable, verbal, and agreed based on immediate affordability
Very few participants considered:
- Interest rates
- Total repayment amounts
- How long repayment would actually last
If they did consider these things were seen as irrelevant due to the pressing need to get money now at whatever cost. Often, decisions were framed as:
- “Can I manage £X this week/month?”
- “This gets me through right now”
For people with neurodivergence, language barriers, trauma, or stress, this monthly/weekly framing masked long‑term harm.
Participants stated that they would have agreed to any total amount due to the nature of the need the money was meeting.
4. Experiences diverge sharply over time
Some participants initially described the experience as “fine” or “helpful” (e.g. Suni, Sue), while others experienced rapid escalation (Sofia, Andrew, Michelle, Steve).
However, even “stable” arrangements relied on:
- Perfect repayment
- Continued goodwill of the lender
- No disruption to income or benefits
When circumstances changed, control shifted quickly to the lender through:
- Increased charges and repayment amounts
- Threats
- Confiscation of property
- Public shaming
- Workplace or home harassment
5. Shame, fear, and mistrust strongly suppress help‑seeking
Across interviews there was:
- Deep shame about debt
- Fear of being judged, blamed, or disbelieved
- Fear of police, immigration consequences, child services, landlords, or employers
- Belief that reporting would make things worse, not better
Many did not distinguish between police, councils, or specialist teams – all were seen as “authorities”. None of the participants had heard of the Illegal Money Lending Team, and once it was explained, only one stated they would have reported had they have known at the time.
Another thing that suppressed help-seeking was a strong sense of not wanting to remove the only credit option that remained available to them. Interviewees described not wanting to report the Loan Shark in case “someone with harder terms” or even worse “nothing” replaced them.
6. Impacts are long‑term, cumulative, and multi‑layered
Beyond financial loss, impacts included:
- PTSD, anxiety, suicidal ideation
- Job loss and housing instability
- Family breakdown and intergenerational harm
- Social isolation and loss of trust
- Continued financial exclusion
Several participants described lasting psychological harm years later.
Recommendations
1. Reframe messaging away from “crime” and towards support and safety
Language focused on “illegal” or “reporting” deters engagement. Most interviewees stated that they would not be honest about their situation if an investigator turned up at their door to ask about it. Messaging should emphasise:
- Confidential, non-judgemental support
- No blame, no consequences for borrowers
- Stop Loan Sharks can help with immediate needs (food, housing, bills), not just enforcement
Recommendation:
Position services as problem‑solvers, not investigators.
2. Intercept people before escalation, at trusted touchpoints
The most credible intervention points identified were:
- Food banks
- Community centres and leaders
- Faith spaces
- Pubs and local shops
- Disability, housing, and migrant support services
Recommendation:
Embed awareness and referral pathways in places people already trust, rather than expecting self‑referral.
3. Use plain, concrete comparisons to explain harm
Abstract warnings about “high interest” were ineffective. Participants responded better to:
- Real examples (“£300 becomes £1,200”)
- Visual timelines
- Weekly/monthly totals shown over time
Recommendation:
Use simple, visual explanations that match how people actually think about money.
4. Deliver communications in community languages and formats
Language barriers and low confidence in English were significant. Written English alone is insufficient.
Recommendation:
- Use translated materials
- Short videos, use examples of WhatsApp messages and voice notes that lenders have sent
- Community ambassadors who “look and sound like us”
5. Separate support access from enforcement decisions
Many would accept help but not report lenders.
Recommendation:
Create and clearly communicate a two‑step pathway:
- Get help and stabilise your situation
- Decide later, safely, whether and how to share information
6. Build confidence among frontline professionals to ask the question
People rarely disclose unless asked directly – but safely.
Recommendation:
Stop Loan Sharks to train food bank staff, housing officers, health workers, and community leaders to ask:
“Are you borrowing money from someone and paying back extra on top?”
…and know exactly where to refer next.
7. Address the structural gaps pushing people into harm
Throughout the interviews, there was a real sense that people didn’t have an alternative option to get the money. A combination of poor credit history, debts and low income meant that mainstream credit could not serve them. This meant that some used the illegal money lender multiple times, stated that they would have borrowed from them no matter what the cost, and were reluctant to report or engage with the authorities on the topic.
Recommendation:
Use lived experience evidence to influence policy partners (local authorities, utilities, DWP, Home Office).
Specific issues
- 2 of the participants met and paid their lender in a pub – can more be done with licensing/Pubwatch schemes etc
- Language considerations given by individual participants:
- “Rip the band aid off” – the idea of reporting now, not waiting until tomorrow
- “If you feel something is wrong, it probably is” – trusting gut instincts
- “Never too late to get help” – no matter how deep you think you are in
- “You have done nothing wrong” – people still believe that they may have broken the law by borrowing in this way
- “You are not to blame” – trying to change the culture of shame
- Most participants did not consider their lender a Loan Shark.
- The understanding of “Loan Shark” is varied – between generations, cultures and languages
- Need more descriptive language to describe situations people find themselves in – need to storytell, present them with a problem that mirrors their own and show Stop Loan Sharks as providing a solution
- Need realistic and accessible alternatives for people – several participants would still borrow from the loan shark as there is no alternative (or no perceived alternative). There cannot be a cultural mindset shift against the normalisation of illegal lending without these alternatives.
- 6 out of 7 of the participants were not physically harmed – despite the threats the lenders sometimes make. Partner agencies and the public need an increased awareness of the coercive control nature of illegal lending to dispel the myth of the “1920s mobster with a hat”.
- There is a whole issue around acceptability and aspiration. Borrowing from illegal lenders can be considered “normal” and “just how it is/what we do”. People may justify borrowing from a Loan Shark without question based on:
- The need they had at the time
- Immediate repayments appearing affordable
- The perception that no one would/should lend to them
- The need to keep this lender as an open line of credit for the future
- Consideration needs to be given to people to whom legitimate credit businesses cannot lend money due to affordability.
In summary
These interviews show that illegal money lending thrives not because people don’t know better, but because:
- mainstream systems fail them at critical moments
- trust is built locally, not institutionally
- fear and shame silence people until harm escalates
Effective responses must therefore be early, relational, culturally grounded, and practical, not purely enforcement‑led.
ENDS
For media inquiries, please contact IMLT press officer Sally-Anne Youll – press@stoploansharks.gov.uk
For more details about the IMLT, contact Catherine Wohlers catherine.wohlers@birmingham.gov.uk