ILLEGAL loan sharks are targeting children in the school gates, a surprise new report through the Financial Conduct Authority has revealed.
The watchdog's look into illegal borrowing found ruthless lenders have stolen customer's an atm card, valuables, passports and physically beaten people who can't settle the money they owe.
But the FCA also found proof of sharks handing out their details to kids leaving school – telling these to obtain parents to call them if they want new trainers.
In other extreme cases, it found some customers were being forced into criminal activity like prostitution or drug running.
Andrew Bailey, chief exec from the FCA, said: "Some of the stories we heard were shocking.
"On one estate loan sharks were hanging around the school gate, handing out their details towards the children as they left school, telling them to get their mums to ring them if they wanted new trainers.
"Many people who borrowed money from loan sharks went without food or fuel or missed rent or home loan repayments to pay the borrowed funds sharks back.
"At worst, we heard types of people having into criminal activity like prostitution or drug running."
Bailey added that it's hard to catch those illegally lending as many clients are fearful of being seen a "grass" in their local community
The report said the problem is "long-standing, often deep-rooted along with a largely hidden practice in lots of deprived communities in the UK."
Often customers turn to illegal lenders when they can't access every other forms of borrowing, like charge cards.
In 2023, the FCA capped the total amount payday lenders could charge customers at 0.8 per cent and there were fears some customers would have to use illegal sharks to create ends meet if they were unable to secure quick credit.
But the regulator found there wasn't any evidence that vulnerable borrowers had been forced on the illegal lending route.
The warning may be the latest inside a number in the FCA about lending.
Last month, it said that progressively more young people are experiencing to borrow money to cover the most everyday bills.
It also revealed that millions of households would struggle to cope if their regular bills increased by jsut lb50 a month.
You can report a loan shark anonymously by calling Stop Loan Sharks on 0300 555 3333 or visit the website www.stoploansharks.co.uk.