Why You Should Avoid A Loan Shark

Loan sharks are very scary people, and they have been known to use less than savoury means of collecting the money people owe them. Threats and violence are common ways of scaring people who borrow money from them, and the best thing you can do is stay away from these unlicensed moneylenders altogether.

There is a difference between loan sharks and licensed moneylenders. Licensed moneylenders are regulated by the Office of Fair Trading (OFT) and must follow a set code of practice. Loan sharks are not licensed and they operate outside the law. If you borrow money from a loan shark you will get a loan on very bad terms, you will have to pay an exorbitant rate of interest, you will get harassed if you are late on paying them, and they pressure you into borrowing more money from them to repay your original loan.

 

Before you accept a loan of any sort - especially a temporary loan like the ones loan sharks are famous for - you need to see if the person doing the loaning is licensed in the United Kingdom by the Office of Fair Trading (OFT) . The Consumer Credit Public Register has a list of everyone who has an Office of Fair Trading (OFT) licence as well as a list of everyone who has ever applied for a licence, had a licence that was taken away from them, or had a licence that was suspended. The list includes all of the trading names the person may have used as well as the type of business that they were involved in. It is free to search the register, and you can do so by calling 020 7211 8608 Monday to Friday from 9:30am to 4:00pm. If the person you are considering borrowing money from is not on this list with a current license, do not borrow from them.

If you discover that you have borrowed money from a loan shark, you need to know that you are under no legal obligation to repay the loan. You actually need to contact the local Trading Standards office immediately and file a report about the transaction and the person you borrowed the money from. They will help you deal with the loan and the loan sharks. Because they are not legally licensed by the OFT, they have no legal right to recover the money that you owe them. They cannot have you prosecuted and they cannot have you put in jail because you have not paid them. You actually have more rights than the loan shark as far as repayment goes.

Also, you do not need to stand around and let the loan shark harass you. This is against the law, and you should report the loan shark to the Trading Standards office immediately and then you need to report them to the police, especially if the loan shark threatens you or uses violence to scare you into paying them. This is illegal and the OFT does not handle harassment lightly. Yes, you may have made a mistake in borrowing the money from the loan shark, but you do not have to stand there and take their harassment or threats.

If you need a loan, go to a licensed lender such as a bank, credit union, or even a cheque cashing service. All of these places are legitimate businesses and are required to operate within the law. Never use a loan shark, no matter how desperate you are for money.





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