What are unauthorised lenders?
Unauthorised lenders, illegal money lenders or loan sharks are firms or individuals that have not been authorised to trade by the FCA and are highly illegal. They tend to target vulnerable people and charge massive rates of interest or demand repayments upfront.
When lenders are not authorised, borrowers are not protected. Sadly, failing to make repayments can result in threats, violence or taking valuable items like a passport or possessions.
The 4 steps to safer borrowing:
1. Check they are authorised
Before applying for a loan, enter the lender’s web address into the FCA register and to check their authorisation status.
2. Avoid cold calls, spam emails and texts
Genuine, authorised firms will not cold call, send you spam emails or texts that promise guaranteed approval or no obligation quotes.
3. Beware of fees and upfront payments
If a firm asks for the first month's repayment before paying out your loan, do not pay it. Most authorised firms will not ask for any repayments before you get your loan.
4. Always use a trusted website to find suitable lenders
Check out Choose Wisely’s listing on the FCA register by clicking here. Choose Wisely will only allow authorised lenders on our site. If you want a list of lenders to compare, a good place to start would be the Choose Wisely Eligibility Checker.