How to protect yourself from loan sharks this Black Friday

Black Friday is nearly upon us and most deals have moved online due to the national COVID-19 lockdown. Loan sharks may see this major shopping event as an opportunity to target potential victims online with deceitful offers for instant cash and quick loans.

Our statistics show one in five victims met their lender on social media in the first half of 2020. New digital ways of communicating have led to an increasing number of online loan sharks – and more people are falling prey to them. But you can protect yourself by knowing what to look out for, and what to do if you suspect someone is lending money illegally.

Follow these top tips to ensure you stay safe from online loan sharks.

Beware of too good to be true loan offers

Beware of loan offers that seem too good to be true, such as an advert on social media for ‘fast cash’ or ‘quick loan’ without the appropriate affordability checks.

It is important to remember that lenders have a responsibility to make sure borrowers understand the details of the loan and carry out thorough checks on any borrowers to ensure they can meet repayments without experiencing financial difficulty.  

Anyone lending money should have the correct permission from the Financial Conduct Authority (FCA). Licensed lenders have to comply with legal obligations in dealing with customers, including the use of proper paperwork and fair collection methods.

If someone lends money as a business without the right permissions they commit a criminal offence and should be reported.

You can find out whether a money lender is authorised by checking the register on the FCA website at www.fca.org.uk. If they are not on the register, report to us on 0300 555 2222 or send us information using our online reporting form

Make sure you know who you are dealing with

Loan sharks can seem friendly and helpful at the start, offering to lend you some money to tide you over until payday, and if you keep up with your repayments, they might stay that way. But if you fail to keep up with their demands, you may be subjected to threats, intimidation and violence.

Loan sharks operate illegally, without the correct permissions from the Financial Conduct Authority and rarely give paperwork, keeping borrowers in the dark as to how much they are paying back.

Some will even take items such as passports as security or even bank cards with the PIN in order to withdraw directly from borrowers’ accounts.

Social networks are a great way to stay connected with others, but you should always be careful about who you accept as a friend. Loan sharks are known to operate in community groups and on local selling pages. These criminals will try to lure you in with loan offers that look too good to be true. If you’ve only ever met someone online or are unsure of the legitimacy of a lender, take some time to do a bit more research. Check the lender is authorised by the FCA.

Never send payment details or personal information to strangers online

Loan sharks may ask for copies of your passport or pictures of your house, the street and your house number as security on the loan. Never send money or give card details, online account details or copies of personal documents to anyone you don’t know or trust.

Don’t post where you live, as you’re making it easy for the loan shark and other criminals to track you down. Remember what you post on social media could put your safety at risk. 

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 on 999.

What to do if you have borrowed from a loan shark

If you spot a suspicious loan advert online, report it to the group admin and contact Stop Loan Sharks.

You are not in trouble if you have borrowed cash or have been paying back a loan from an illegal money lender, the loan shark is. They are the people committing a crime, not you.

Loan sharks can be reported by calling our confidential helpline on 0300 555 2222, available 24 hours a day, seven days a week.

Alternatively you can email us on reportaloanshark@stoploansharks.gov.uk or use Live Chat in the bottom-right hand corner of the screen to talk online with a support worker, safely and in confidence. Live Chat is available Monday to Friday, between 9am and 5pm.

If you’re thinking about using a loan shark because you can’t borrow money anywhere else, there are a number of organisations which offer free debt advice such as Citizens Advice, StepChange and Money Advice Service. You can also contact your local credit union about safe savings and affordable loans.