When you think of loan sharks, you probably picture someone obviously dodgy – the kind of person you’d never trust with your money in the first place. But the reality is much more unsettling. The most dangerous illegal lenders are often the ones who seem completely trustworthy.
Recent research shows that 56% of loan shark victims initially considered their lender a friend, while one in ten had met them at work. These aren’t strangers lurking in dark alleys – they’re colleagues offering to help with short-term cash flow problems, acquaintances who seem genuinely concerned about your financial difficulties, or friends of friends who present themselves as doing you a favour.
The colleague who “helps out”
Malai Gambrill worked at a hospital in Kent where she was well-liked by her colleagues. When staff needed money, she was happy to help out with loans. She seemed like exactly the kind of person you could trust – someone you worked with every day, someone who knew your circumstances, someone who understood the pressures of working in the NHS.
One colleague borrowed £3,000 from Malai, agreeing to pay back £300 plus £15 interest every month. It seemed reasonable – a colleague helping another colleague through a difficult patch. But over the next three years, despite paying Malai a total of £4,650, she was told she still owed the original £3,000.
When the police investigated, they discovered Malai had lent over £80,000 to colleagues, charging interest rates of around 60%. She was using her position of trust and her knowledge of people’s financial vulnerabilities to trap them in impossible debt cycles.
The consultant’s side business
Dr Arjan Damjibhai Savani was a respected consultant at Northwick Park Hospital. When he offered loans to lower-paid colleagues, it seemed like a generous gesture from someone who understood their financial pressures. Who would question the motives of a medical professional?
Over time, Dr Savani lent over £1 million to hospital staff, charging extortionate rates and using shame and professional relationships to pressure people into payments they couldn’t afford. His victims trusted him because of his position, his apparent success, and his understanding of their working environment.
These cases aren’t unusual. Loan sharks often operate within existing social networks because trust makes their victims more vulnerable and less likely to report them.
How the friendly facade works
The most effective loan sharks understand that trust is their most valuable asset. They position themselves as helpful community members rather than predatory lenders. They know your name, your circumstances, and your pressures. They offer help when you need it most, and they make the initial terms seem reasonable.
This approach works because it exploits natural human psychology. When someone you know and trust offers help during a difficult time, it feels different from dealing with a faceless lending company. You’re more likely to agree to terms you might question from a stranger, and you’re less likely to seek outside advice about whether the arrangement is fair.
The transition from helpful friend to threatening creditor can happen gradually. Maybe the interest rate goes up unexpectedly. Maybe new fees appear that weren’t discussed initially. Maybe the repayment terms change without warning. By the time you realise something’s wrong, you’re already trapped in a relationship where the balance of power has completely shifted.
The simple truth about what makes lending illegal
Here’s what many people don’t realise: if your colleague, friend, or acquaintance is charging you interest on a loan – even just a little bit – and they’re not officially authorised to lend money, they’re breaking the law. It doesn’t matter how nice they are or how reasonable the rate seems.
The basic rule is straightforward – you need proper authorisation to lend money for profit in the UK. This means:
- Any interest makes it illegal: Whether it’s 5% or 50%, if someone without authorisation is making money from lending to you, they’re operating as a loan shark.
- Being friendly doesn’t change this: Your relationship with the lender – whether they’re a colleague, neighbour, or family friend – doesn’t affect the legal requirements.
- There’s no “small loan” exception: The law applies whether you’re borrowing £50 or £5,000. The amount doesn’t matter.
This might seem harsh, especially if someone genuinely seems to be trying to help. But these rules exist to protect borrowers from exactly the kind of situations that Malai and Dr Savani created – where trust gets exploited and “helpful” arrangements turn into financial traps.
Red flags that should worry you
If someone offers to lend you money, be cautious if they:
- Charge any interest or fees without proper authorisation: You can check if someone is authorised to lend on the FCA register – if they’re not listed, any interest they charge is illegal.
- Keep everything informal: Legitimate lenders must provide proper written agreements. Handshake deals or casual arrangements aren’t legally protected.
- Use personal relationships to avoid questions: Saying things like “we’re friends, we don’t need paperwork” or “just between us” are warning signs that something isn’t right.
- Change terms whenever they want: Legal lenders can’t just decide to charge you more or change repayment schedules without following proper procedures.
Why workplace loan sharks are particularly dangerous
Workplace-based illegal lending is especially harmful because it traps people in situations they can’t easily escape. You can’t avoid someone who works in the same building, and the professional relationship creates additional pressure to keep paying even when the terms become impossible.
Workplace loan sharks also exploit specific knowledge about their victims’ employment situations. They know when people get paid, they understand the financial pressures of particular jobs, and they can use professional relationships to apply pressure in ways that external lenders cannot.
The shame factor is also more intense when the illegal lender is someone you have to see every day at work. This makes victims less likely to report the crime or seek help from authorities.
What to do if you suspect illegal lending
If someone at work or in your social circle is offering loans with terms that seem too good to be true, trust your instincts. Legitimate lending involves proper documentation, clear terms, and regulatory oversight. Anything informal should be treated with extreme caution.
If you’re already involved with someone you now suspect is a loan shark, remember that you’re the victim of a crime, not a participant in one. Lending money without proper FCA authorisation is illegal, regardless of whether the lender seems friendly or trustworthy.
You can report suspected illegal lending confidentially by calling 0300 555 2222 or emailing [email protected]. The authorities have experience dealing with these situations and can provide support without putting you at additional risk.
Legitimate alternatives that actually help
The reason workplace loan sharks succeed is that they’re filling a genuine need for accessible credit among people who might not qualify for bank loans. But credit unions exist specifically to provide ethical, affordable lending to people in exactly these circumstances.
Credit unions are properly regulated, offer clear terms and conditions, and are designed to help members build financial stability rather than exploit their vulnerabilities. The interest rates are transparent, the repayment terms are fixed, and you have legal protections if anything goes wrong.
Most importantly, credit union loans are designed to get smaller over time as you make payments, rather than growing larger through compound interest and hidden fees. The goal is to help you solve your financial problem, not to trap you in permanent debt.
Protecting your workplace community
If you work in an environment where informal lending happens frequently, it’s worth being aware that loan sharks specifically target workplaces because they provide access to people with regular incomes who might not qualify for mainstream credit.
Healthcare workers, education staff, and public sector employees are particularly vulnerable because they often have steady employment but lower salaries that make traditional lending difficult to access. Loan sharks know this and specifically target these professional communities.
Creating awareness about the warning signs of illegal lending can help protect colleagues from falling into these traps. Most people who borrow from workplace loan sharks don’t realise they’re dealing with criminals until the situation has already become dangerous.
The most important thing to remember is that legitimate help doesn’t require you to keep secrets, accept informal arrangements, or trust someone just because you work with them. Real financial assistance comes with proper documentation, clear terms, and legal protections.
If someone’s offering to help with your financial difficulties, make sure they’re actually trying to help rather than trying to exploit your trust for their profit.
