Shining a light on illegal money lending: consumer experiences of unauthorised lending in the UK

Last year we conducted research with our consumer network partners into the experiences of consumers who had borrowed money from unauthorised lenders, otherwise known as loan sharks, in the UK. This research report summarises what we were told and includes some insights from individuals directly affected by what is commonly known as illegal money lending.

Read the illegal money lending research report (PDF)

We took over responsibility for regulating consumer credit from the Office of Fair Trading in 2014. Consumer credit activities aimed at individuals, whether or not interest is charged, will generally require authorisation, with some exemptions. We authorise firms that provide consumer credit to ensure that they meet the required standards and treat customers fairly. Lenders undertaking regulated activity without the necessary authorisation are likely to be operating illegally.

Illegal money lending operates below the regulatory radar. It can be difficult to identify and quantify this unauthorised lending activity, given the taboos that surround it and what is at stake. For consumers, that could be shame or violence, and for lenders fines or imprisonment. To overcome this, throughout 2016 we reached out through our network of consumer and community contacts across the UK and held a series of conversations and discussions to get underneath the surface of this complex issue. We wanted to improve our understanding of illegal money lending, by hearing the stories of hard-to-reach consumers from those who work to help them. Additionally, the illegal operation of credit lending has implications for the legitimate market. We issue warnings and take appropriate enforcement action against unauthorised activity and work closely with the Illegal Money Lending Teams (IMLTs).

From speaking to people who work with those affected by illegal money lending, and the information they have shared, we have gained some insight into:

  • how consumers become involved with unauthorised lenders
  • what those lenders look like and
  • how they operate

We particularly wish to thank our consumer network partners without whom we could not have done this work. We are always interested to hear of any further insights into this activity.


Please email responses to: consumer[email protected]