While loan sharks may seem tempting, they aren’t worth the hassle. Read on for more information on these predatory lenders and learn about the many legitimate alternatives. You can also find out where to report illegal loan sharks to the Illegal Money Lending Team.
Legitimate alternatives to illegal loan sharks
Getting a loan from a loan shark is not a good idea. These individuals charge high interest rates and offer large amounts of money for short-term loan.
These amounts can be sky-high when compared to the legal limits, and they may even keep the collateral. If you need fast cash, consider a legitimate lender. Legitimate short-term lenders offer flexible eligibility requirements and legal rates of interest.
Despite their bad reputation, there are legitimate alternatives to illegal loan sharks. These lenders operate without strict lending criteria, and they prey on people who are desperate and in need of cash.
Many loan sharks prey on people with poor credit scores or delinquent accounts. They may target people who have missed several payments on their accounts or have unexpected emergencies. In any case, they are dangerous and need to be avoided.
High interest rates
Beware of loan sharks, they operate without a consumer credit licence. It is a criminal offence to lend money to customers without an FCA licence.
Although this may seem like an unavoidable option, it is a bad idea to borrow money from unauthorised lenders. These loan sharks often pose as legitimate doorstep lenders and will offer you a payment book or an agreement. Despite these claims, you are not legally obliged to repay the loan.
While the Consumer Financial Protection Bureau does not require lenders to consider the ability of the person applying for the loan to repay it, there are local financial institutions that offer small loans with flexible eligibility requirements.
Some of these institutions require only an individual taxpayer identification number (also known as a Social Security number) or an undocumented worker identification number. Undocumented workers face high interest rates, so it is imperative that they carefully review their finances and make sure that the loan amount is affordable and can be repaid.
Illegal loan sharks prey on the unwary by using predatory tactics to take advantage of victims. These people often appear friendly, but the reality is that they are shady businessmen who can trap their victims into debts that can’t be paid back.
Some of them have even been known to resort to violent tactics, such as blackmail and kidnapping. Birmingham City Council hosts an Illegal Money Lending Team to fight these unscrupulous lenders and protect consumers.
To make matters worse, many of these loan sharks operate without Financial Conduct Authority authorisation, meaning that they are subject to prosecution.
To protect themselves, these people often use intimidating tactics and high interest rates to lure victims into paying their debts. In addition to aggressively targeting their victims, loan sharks may even threaten to take personal possessions as security, or to make sexual advances if they don’t get their money back.
Threats of violence
Often, people who are missing repayments from their illegal loans face threats of intimidation, violence, and sexual coercion from these rogue lenders.
In fact, a major report on the lending sector found that many loan sharks had moved online, using social media and online chatrooms to spread their illegal practices.
Even if the crime is illegal, investigators cannot always be as responsive and effective as they might like. This is partly because coronavirus restrictions make it difficult to serve warrants, and the use of online chat rooms may limit the ability of investigators to get to these borrowers. Nonetheless, the number of new investigations into loan sharks decreased significantly during the first half of 2020. In seven months, the number of new investigations fell by almost 80%, a drop of 77.
The vast majority of loan sharks operate from their homes, charging incredibly high interest rates and not offering any paperwork that outlines the loan. They do not disclose the details of the loan, and they usually have many customers.
These illegal loan sharks often threaten their victims with violence and take their valuables as security. Some have even forced non-payers into prostitution and drug dealing. If you’re worried about getting a loan, make sure to contact the North-East Illegal Money Lending Team for tips on avoiding loan sharks.