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Unauthorised lenders: spot the shark

Written by Mark Grimley

Published on 21st September 2022

You might think loan sharks are just in the movies but unfortunately, they’re a harsh reality. We want you to be prepared.This guide will talk you through what you need to look for and how to report a shark.

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.

If you are currently in trouble with an unauthorised lender, they have no legal right to recover your debt. Contact Stop Loan Sharks: 0300 555 2222.

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.

If it sounds too good to be true, it probably is. Get help with your debts Money Helper: 0800 011 3793.

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.

How to report an unauthorised lender If you feel a lender may be unauthorised or you’ve been victimised by a loan shark, contact the below:

Find credit cards for bad credit

Have bad credit? Have a look at the full range of credit cards and compare your options using a Choose Wisely comparison table.