Within the past year, more than 100 suspects have been arrested in Singapore for involvement in fraudulent money lending activities. There are instances where the borrower has been forced to repay more than 10 times the amount they borrowed. Illicit money lending has been a constant threat for this otherwise useful industry. Loan sharks tempt people in dire requirement of money to be partners in their activities like gambling abroad. When the borrowers are unable to pay up due to the unreasonable terms, they are harassed. This is exactly why you should avoid borrowing from any unlicensed moneylender and should always opt to borrow it from a licensed money lender. But how would you identify them? Here are some signs to watch out for.
First things first, check out the list of licensed moneylenders in Singapore. If don’t find it there, it could a warning sign to borrows. Also, check whether your lender is:
If you notice any of these signs, report immediately to the Registry of Moneylenders with the necessary information.
Licensed lenders can advertise only through the following channels.
Watch out if a certain moneylender advertises elsewhere. Generally, unlicensed lenders have been found to send out flyers, text messages or emails informing you about their services. Report such companies.
Effective from October 1, the cap on moneylenders’ interest rates is at 4% instead of 20%. This is for debtors with annual income below S$30,000. This law has encouraged unlicensed lenders to use SMS tactics to con borrowers. The attempt is to get prospective debtors to respond and deceive them into borrowing money illegally. Watch out for the following tactics.
You could also be encouraged to respond to a number via call, text or WhatsApp to avail guaranteed approval. Watch out for any such signs.