When people borrow from an illegal lender, many believe they are dealing with a friendly acquaintance. In 2024, 57% of the borrowers supported by the IMLT initially thought their lender was a friend.

The primary reason for borrowing remains household expenses, with many struggling to cover rent, bills, and groceries and 50% of borrowers went without food and fuel to make repayments. A huge 91% of borrowers supported in 2024 had no savings to fall back on.

Many borrowers are unaware of alternative sources of financial support. Nearly half (47%) had never heard of credit unions. Loan sharks exploit this, convincing borrowers there are no other options, leading them into a cycle of debt. The statistics show that 76% of individuals borrowed multiple times.

The financial burden of illegal lending in 2024 has escalated with clients borrowing higher amounts compared to previous years. While only 3% took out loans of less than £100, 71% borrowed between £300 and £10,000. The median amount borrowed stood at £6,100 – double the median of 2023.

However, the cost of these loans is far more than what was originally borrowed. On average, borrowers ended up repaying £12,300 – more than twice the amount borrowed.

The research reveals 100% of borrowers who applied for legal credit in the past year were declined, leaving them to seek alternative, sometimes illegal, options. Key insights include:

• 67% of borrowers had incomes below £20,000
• 10% of victims were self-employed, a higher percentage than in previous years
• 11% borrowed due to financial struggles linked to the COVID-19 pandemic
• 49% of borrowers reported mental health issues, the highest percentage recorded so far, demonstrating the devastating psychological toll

Loan sharks can using social media to reach potential borrowers, which they then use to intimidate victims. Some lenders have even introduced a sexual element to their demands, with 9% of borrowers reporting that lenders suggested sexual favours when repayments were missed.

Efforts to combat loan sharks and support victims are intensifying. The Financial Conduct Authority (FCA) has taken action by applying to cancel permissions for unscrupulous lenders. Meanwhile, the IMLT, known in communities as Stop Loan Sharks, continues its national awareness-raising campaigns and activities.

National Stop Loan Sharks Week is held every year (this year it runs from 19 to 25 May) and aims to highlight the dangers of illegal lending and encourage victims to seek help.

Weeks of Action are held in local communities throughout the year to raise awareness, with the help of local partners.

Proceeds of Crime Act (POCA) funding – money seized from convicted loan sharks – is used to support anti-loan shark efforts. Educational resources such as grime music videos and school packs are available.

There are ongoing targeted awareness campaigns for vulnerable groups, such as those over 55. Leaflets and other publicity material, including posters in a variety of different languages – are available to order or download for partners to share.

Social media toolkits are produced for partners to share. Free training is offered to organisations working with potential borrowers.

As well as awareness-raising, the IMLT have a team of investigators working continually across England to investigate and prosecute loan sharks. Recent successes after IMLT investigations include:

• a violent loan shark who terrorised borrowers in Barnsley jailed for seven years
• a loan shark in Coventry jailed for 31 months and made the subject of the IMLT’s first Criminal Behaviour Order, which means he must not provide or collect unauthorised loans, directly or indirectly after his release
• an illegal lender in Middlesbrough who sent threatening messages to people who struggled to pay given a two-year jail term suspended for two years.

The fight against illegal lending requires a collective effort. Whether you work in a community organisation, a financial institution, or a support service, you can help by taking up free training to recognise and report loan shark activity.

To report a loan shark, or access support, call the Stop Loan Sharks 24/7 Helpline on 0300 555 2222 or visit www.stoploansharks.co.uk. Live Chat is available on the website 9am to 5pm Monday to Friday.

To find out more about free training, go to www.stoploansharks.co.uk/for-partner-agencies.