In this write-up, we will disclose the facts about illegal loan sharks. Nowadays many people may be facing a financial crisis, so they have to borrow some money to overcome their crisis. But before you borrow money from any source, you should know that you are borrowing money from an authentic source or an authentic person.
A money lender should be authorized by the FCA before lending money to people. FCA stands for Financial Conduct Authority. It is a legal way of lending money. But if someone is not authorized by FCA, then his work is illegal.
If you want to have complete details about illegal loan sharks, stay with us till the end!
What is a loan shark?
We will share all the necessary details about illegal loan sharks. The person working as a money lender should be authorized by FCA. All the lenders who are not authorized by FCA are called loan sharks. Because these people are working illegally and breaking the laws.
These loan sharks usually work remotely and they work illegally. As they charge a very high-interest rate and they even do not do any paperwork. There should be a paper agreement between you and a money lender for authenticity. Loan lenders are working at a high scale and they have many customers.
Stay away from the loan sharks as they may lead you towards a critical situation. As many illegal loan sharks start threatening you or may take your credit card if you do not pay on time or maybe before the time. Do most people have a query about Are loan sharks are illegal? Loan sharks are illegal as they are not authorized by FCA.
How to identify and avoid an illegal loan shark?
You should know that anyone who is lending money is authorized by FCA.
- First thing is that an illegal loan shark will never go for any paperwork. Doing paperwork shows its authenticity.
- Secondly, illegal loan sharks do not go for bank transfers, they deal in cash. But now, some of them may be using bank transfers also.
- Illegal loan sharks do not share interest rates with you at the time of money borrowing. These things should be an alarming situation for you if you are taking a loan from a money lender.
- Some of the illegal loan sharks take your things in their possessions like by taking the paper of your house or maybe they take your bank card as security. It is the worst thing about these illegal loan sharks, you should always avoid such money lenders. You are at great risk if you deal with these kinds of money lenders. And these money lenders are working at a high scale remotely.
- Some loan sharks increase their interest rate whenever they want. They do not care about your financial situation. These things take you into a financial crunch that you cannot overcome easily.
- Loan lenders start threatening you before the time of repaying. These threats may lead you towards a bad mental health condition.
- If you have become the victim of any illegal loan shark, then you should follow all the rules settled by you and the money lender.
What makes loan sharks illegal?
A loan shark is illegal as they start threatening the people and most of them take your possessions illegally.
Why are loan sharks substandard?
People get attracted to the loan sharks as they appeal friendly in the starting with you. But their reality comes in front soon, as you start taking more money from these money lenders.
There are some downsides of illegal loan sharks that are listed below:
- First thing is that money lenders charge high-interest rates.
- The legal money lenders do not charge very high. Their interest rate is less than illegal loan sharks.
- After some time, illegal loan sharks will start pressuring you to pay the loan before the settled time. And to pay that loan, you borrow more money. In this way, you will have a high debt that is difficult for you to pay.
- Illegal loan sharks start threatening you, and even in some critical conditions, they will take your credit card, which will be a great loss for you in the end!
Alternatives to loan sharks:
There are many alternatives to loan sharks available. Some of them are:
- Credit unions
- Help from the government
- Dealing with debt
Check the legitimacy of a loan shark:
FCA makes a list of all authorized lenders, you can go and check whether the person is on the list or not, if it is not on the list, then do not borrow from that money lender. It will be an easier way to check the legitimacy of a loan shark.
How to report a loan shark?
- In England, they provide you a contact number where you can report an illegal loan shark. The contact number is 0300 555 2222.
- In Scotland, they provide you with a contact number where you can report an illegal loan shark. The contact number is 0800 074 0878. They also have online Trading standards in Scotland where you can report an illegal loan shark.
- In Wales, they provide you a contact number where you can report an illegal loan shark. The contact number is 0300 123 3311.
So, make sure about the legitimacy of the money lender before you borrow a loan.
It was a brief discussion about the illegal loan shark and how you can identify them. If you want to borrow money, go for a legal money lender. Did you like this piece of information? Let us know in the comment box below.