- More than two million people across the UK may now be borrowing from illegal lenders
Britain is facing a growing illegal lending crisis as record numbers of cash-strapped households turn to loan sharks to cover everyday living costs, according to new analysis from the Centre for Social Justice (CSJ).
The number of people borrowing from unscrupulous money lenders has risen by 500,000 since 2022 to around 1.7 million people in England and more than two million across the UK.
The findings are to be featured in a new documentary, Hunting the Debt Predators: Dispatches, airing today at 8pm on Channel4 [Friday 12 June].
The CSJ warns that the traditional image of the violent, anonymous loan shark no longer reflects the reality facing many victims.
Drawing on new data from the Illegal Money Lending Team (IMLT), the analysis shows that between 2022 and 2025:
- 66 per cent of victims met their loan shark through friends or family;
- 60 per cent considered the lender a friend before borrowing;
- 28 per cent were threatened with social media shaming.
The findings reinforce concerns first raised in the CSJ’s 2022 report Swimming with Sharks, produced in partnership with Lowell, which highlighted the growing use of psychological manipulation, online humiliation and coercion by illegal lenders, often in place of physical violence.
The research also suggests there is little sign of demand for illegal lending easing.
The most common reason for borrowing from a loan shark was to cover essential everyday costs such as groceries and household bills.
Other reasons included supporting family members, paying for funerals and weddings, vehicle repairs and business expenses.
Many victims reported turning to illegal lenders because they either could not access regulated credit or believed they would be rejected. Nearly three quarters of those who sought alternative credit were turned down by regulated lenders.
Opinium, on behalf of the CSJ, surveyed 4,103 adults and found that 3.7 per cent of respondents were currently borrowing from someone in their local area who charged interest but was not a legitimate lender such as a bank, authorised doorstep lender, payday lender or credit union.
The CSJ is calling for renewed action to tackle illegal money lending, including:
- Stronger enforcement against illegal lenders, including action against the use of social media to harass victims under the Online Safety Act;
- Expanding access to safer and affordable credit, including promised reforms to common bond rules and a review of the role of high-cost credit;
- Strengthening the debt advice sector through improved training and better referral pathways to the IMLT.
Ben Gregg, Head of Welfare at the Centre for Social Justice, said:
Hundreds of thousands of people are borrowing from illegal lenders, often with little to no idea that their creditor is acting illegally.
Many consider unlicensed lenders to be friends and members of their community and continue to repay their debts even after loan sharks have been arrested.
None of our policy changes are costly. They require small legislative amendments and the strengthening of action already underway. But they would be life-changing for the victims of illegal money lending.
John Pears, UK CEO of Lowell, said:
More people turning to loan sharks lays bare just how fragile household finances have become. Too many households are living without any meaningful financial buffer, leaving them exposed when even a smallest shock hits.
“If we are serious about tackling illegal money lending, enforcement alone will not be enough. We need to address the root causes that allows these lenders to exploit people in the first place. That means real, sustained action to strengthen financial resilience and ensure people can access realistic, affordable support before they are pushed into dangerous alternatives.
The report comes as Britain’s unsecured consumer debt exceeds £250 billion, averaging £8,600 per household, while 84 per cent of UK adults now hold at least one consumer credit product.
ENDS
Lowell is one of Europe’s largest credit management companies with a mission to make credit work better for all: clients, customers and communities and a commitment to fair and ethical customer practices. It operates in the UK, DACH and the Nordic regions and employs over 3,600 people. For more information on Lowell, please visit our investor website: www.lowell.com