I borrowed from a mortgage shark: I’ll dwell the remainder of my life in concern

Vulnerable people across the UK are falling into debt with loan sharks every year, with recent data showing as many as three million have used illegal lenders in the past year alone.

In many cases, people don’t sign paperwork and are then left paying the price. Some are left paying far more interest than they agreed, as well as facing intimidation, threats and violence.

Below, Katie (whose name we have changed) tells her story – and how she now lives in fear of the person she borrowed money from.

Long lasting impact: Katie and her son both experienced mental health problems after borrowing from a loan shark (stock image, posed by model)

‘It bulldozed my life,’ Katie says. ‘That’s the only way to describe it.’

‘These people aren’t who they say they are. He masked his real nature. He pretended to be this respectful man who was there to help, as long as I paid back when I said I would. 

‘He said there wouldn’t be any trouble, and he wouldn’t hound me, he said he didn’t believe in that.

‘After a few days, he was totally different.’

Katie had borrowed £1,000 from the loan shark in order to pay for Christmas – but ended up paying back more than £3,500 over the course of four months.

After going through a relationship breakdown and subsequent mental health issues, Katie lost her job as a support worker and found herself struggling to make ends meet.

‘It was leading up to Christmas. Like any other parent, I was thinking, “What am I going to do?”‘ she said.

A friend recommended a local loan shark who she said would be able to lend money within 24 hours. Having been unable to get a loan elsewhere, and with little family to turn to, Katie felt it was the only course of action.

Virraj Jatania is chief executive of Pockit, a company offering a range of digital banking services, including pre-paid cards. These are often used for everyday spending by those who have poor credit and might struggle to open a current account at a traditional bank. 

He says Katie’s situation is a common one: ‘When the most vulnerable people in society are excluded from the financial system, desperation can drive them into the hands of dangerous loan sharks, putting them at risk of intimidation and violence.’ 

Just days after borrowing the money, the loan shark came to Katie’s door and said the repayments were £60 per week, rather than £60 per month as she had previously been told. 

She says: ‘I couldn’t do it, I wasn’t in a position to do so. I told him he had lied; I got the messages to show that it was £60 per month. He denied it and said there was a typing error and that it should say every week.’

When she couldn’t afford to keep up the payments, the loan shark made threats.

‘He would turn up at my door first thing in the morning as I was taking my son to school and confront me, or in the evening as I was getting into bed,’ Katie says.

‘He would send nasty letters through my door, and kick the door or bang on the windows until I answered.

‘It escalated every week, it was rising and rising.’

Eventually, Katie left her home. She said: ‘As a mum, and a human being, I wasn’t sure I could stand going through any more of what I went through.

‘I suffered from mental health issues prior, but never to this extent. The anxiety of it, there was no way out, he was hounding me every day.’

The loan shark was jailed thanks to Katie speaking up, and was found to have committed violence to multiple women that he had lent money to.

As a result of the trauma caused by the threats she received, Katie was sectioned under the Mental Health Act and spent time in hospital. Her son, now 11, still has intense therapy because of the experience.

‘To this day it’s left me in a very difficult place,’ Katie told This is Money. ‘I still don’t like being outside. [The loan shark] knows it was me that spoke out, so I’ll spend the rest of my life living in fear.’

‘I don’t want to look back in ten years’ time and think: “Why did I let him ruin such a huge part of mine and my child’s lives?”‘

Illegal money lending on the rise 

With the cost of living having become ever more difficult to cope with, illegal money lenders have been able to thrive on those wanting for cash.

‘A 2023 survey revealed that over three million people in the UK had borrowed money from illegal lenders in the past three years,’ Jatania says. 

‘No one should have to resort to this just to make ends meet. The new Government must prioritise tackling illegal loan sharks and move forward with its pledge to deliver a financial inclusion strategy that ensures everyone has access to credit and other vital services in a safe and regulated way.’

The experience with the loan shark has profoundly affected Katie’s life, as well as that of her son, but the importance of raising awareness of illegal money lending outweighs this, she says.

‘There are a lot of mums out there who will try to save Christmas, or try to save a birthday, and do what I did without realising the detrimental effect it will have on their child.

‘As a parent, you want to be able to give your child that Christmas, but I would rather have saved my child’s mental health, and protected my child, than save Christmas. Christmas will come back around.

‘I relive it every time I speak about it, but if it means it’s going to save or educate just one person, then I would do it every single day.’