Isle of Man: Moneylending In The Isle Of Man

Last Updated: 30 January 2014
Article by Andrew Webb

The Moneylenders Act 1991 (the 1991 Act) was intended to regulate lending practices in the Isle of Man by providing a regulatory framework for consumer loan agreements.

The Act however has suffered from its open drafting, and has created a regulatory burden and an environment of uncertainty for businesses on the Island which have had to assess, until this year, even innocuous intra-group lending to determine whether registration under the Act is required.

In 1908 the first Moneylenders Act (the 1908 Act) was enacted on the Island following the introduction of the 1900 Act in the UK in order to regulate moneylending. It introduced the requirement that any person who carried on a business of moneylending or advertised himself as such on the Island, had to register in order to do so or be liable on conviction to a fine and/or imprisonment.

Tynwald (the Parliament of the Isle of Man) recognised the need for further legislative protection for the potential victims of 'loan sharks', leading to the introduction of the 1991 Act. The 1991 Act updated the framework of the 1908 Act and also included supplementary provisions relating to the harassment of debtors, canvassing outside of trade premises and powers for the then Board of Consumer Affairs (now the Office of Fair Trading (the OFT)) to introduce regulations to regulate certain credit transactions.

The 1991 Act requires that any potential party, not otherwise exempt in terms of the Act or by Order, would need to be carrying on a 'business' of lending money in the Island in order to fall within the definition of a moneylender and therefore be required to register. The 1991 Act describes a list of institutions that are exempt from the requirement to register and includes, among others, those institutions holding an Isle of Man licence to hold deposits, certain Isle of Man building societies, and authorised Isle of Man insurers. In addition to the listed institutions, there is a power to exempt by regulation of Tynwald. The 1991 Act did not distinguish between different types of lenders and borrowers, and as such could include any lending in the course of a business which is outside the stated exemptions, even in situations of corporate intra-group financing.

The OFT has taken the stance that the requirement to register under the 1991 Act does not extend to the provision of hire purchase or credit sale facilities, or the issuing of credit cards. However, the 1991 Act makes it clear that merely collecting money due under a loan or a related transaction does count as carrying on a business of lending money. It is immaterial if that contract or loan is technically entered into outside the Isle of Man if the money is to be collected here.

If a person carries on a business of moneylending on the Island and is not registered or exempt, an offence will be committed and the person will be liable to a fine. However, the consequence of illegality is that, whether or not it is in the interests of justice between the lender and borrower, the legal right to recover money under a loan contract is lost.

'Carrying on a Business'

The expression 'carrying on a business' of moneylending, (the state of affairs that must exist for a party to fall under the requirement to register), is difficult to interpret. The English Court of Appeal case of R v John Francis Napoli [2012] EWCA Crim 1129 held that an individual who accepted deposits on two occasions that were 18 months apart would be considered to be accepting deposits 'by way of business', and therefore liable to conviction for carrying out an unauthorised regulated activity under the Financial Services and Markets Act 2000 (an Act of Parliament). The Court of Appeal held that on the facts (the size of the deposits, the detailed contracts that delivered the deposits and the profit motive) the transactions had been made 'by way of business'. The knowledge that the definition of 'business' can be interpreted by the courts to extend to situations where only infrequent transactions have taken determining whether they are required to register.

The Moneylenders (Amendment) Act 2012

The Moneylenders (Amendment) Act 2012 received Royal Assent on 11 December 2012 and came fully into operation on 15 May 2013 (the Amendment Act). The government has recognised that change is essential, but has not yet favoured a repeal of the 1991 Act due to the time and expense of introducing completely new legislation. As a short term solution, the recently introduced Amendment Act should reduce the amount of transactions caught by the 1991 Act. In the long term a more complete solution would be a complete re-writing of the legislation with the Financial Supervision Commission taking on the majority of the functions that the OFT currently exercises in regulating the corporate business element, leaving the OFT to administer small borrowings. The Amendment Act aims to provide a simple solution for the ambiguities inherent in the 1991 Act by providing the OFT with wider powers to exempt persons from the need to register as moneylenders.

Despite the best intentions of the OFT to resolve the uncertainty and complications regarding the need to register under the 1991 Act, the framework of the 1991 Act will mean that problems of interpretation are likely to persist. Since the original intention of the 1991 Act was to provide protection to consumers on lower incomes, we would submit that consumer protection should form the subject of a new Bill which does not attempt to build on the loose and ambiguous foundations of the 1991 Act.

Exempt Persons and Transactions

The Regulations came into operation on 22 May 2013, to complement the Amendment Act. It extends the list of exempt persons and details the transactions which are now exempt from the triggers of registration under the 1991 Act (as amended by the Amendment Act).

The broad scope of the 1991 Act means that a wide range of transactions previously triggered the requirement to register. The Regulations therefore aim to restrict these transactions to those that the 1991 Act originally intended to protect. As stated above, the 1991 Act was introduced to protect individual consumers and these new Regulations reflect this purpose by exempting transactions between body corporates. This should largely assist corporate intra-group financing in the future.

However, unfortunately these Regulations are not a cure all. Transactions between a lender and a sole trader (no matter how sophisticated) do not fall under the exemptions notwithstanding that if that individual incorporated, the transaction would be exempt!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions