You may see or hear over the news about loan shark harassment in Singapore or those loan sharks are having new tactics to harass debtors. Even the economic crisis has been taken advantage of by unlicensed moneylenders or loan sharks also known as ‘ah long’. They use it as a chance to trick desperate individuals into making ‘advance payment’ to get a loan which was never granted.
Ah longs or loan sharks provide higher interest rates and apply unregulated harassment methods to chase the debtors which can even resort to violence. This is the reason why borrowing with loan sharks can end up as a nightmare.
You might be one of those who have an urgent need for money and decide to borrow from a moneylender but end up borrowing with a loan shark. Don’t panic, you can still stay away from them.
But, first, it is essential to recognise if you are dealing with a loan shark.
How to Identify If you are Dealing with a Loan Shark in Singapore?
Loans sharks are very popular for their bad reputation but still, they have tricked numerous individuals around the world. Even Singaporeans can’t escape their creative measures. Especially those individuals who are in need of quick cash loans and can’t borrow from banks or other financial institutions.
Here are the ways to know if you are dealing with a loan shark:
1. They are not included in the list of licensed moneylenders by the Registry of Moneylenders – Ministry of Law.
Currently, there are over 150 licensed moneylenders in Singapore. This only implies that they don’t have a licence to operate and belong to unlicensed moneylending.
FACT: Every month the Registry of Licensed Moneylenders – Ministry of Law updates its list of licensed moneylenders. Always verify a moneylender on that list. Remember that a lender has a licence to operate if it is included on that list.
2. They don’t have an existing licence number; you can’t find this on their website.
FACT: A legal lender operated with a licence under the Registry of Moneylenders – Ministry of Law. You must verify it to the list provided by the Registry of Moneylenders, or you can see it here.
3. They don’t have a business address or if there is any it can’t be found in the list provided by the Registry of Moneylenders.
FACT: A licensed moneylender needs to have a registered business address since they need to have a personal verification wherein you must go down to their office before your loan can be granted. So, if a lender tells you that they will just transfer the money and can’t meet you, they are illegal lenders. Also, if their address is not on the list of licensed moneylenders, it’s another sign that you are dealing with an Ah long.
4. They send out a loan invitation through SMS (from WhatsApp or Messenger), a text message, a flyer, or an email.
FACT: A licensed moneylender is not allowed to reach out to its borrower or prospective borrower through social media, text messages, a flyer, and email.
5. Uses online marketing tactics to lure borrowers.
They use paid search results such as Google Ads to advertise and use a fake website that resembles a licensed moneylender. They even use a website URL that is similar to a licensed moneylender, so you have to be very keen to spot the difference.
They may create a social media account such as on Facebook and claim as a licensed moneylender.
Also, they may create a neatly designed website and pretend to be a licensed moneylender.
FACT: A licensed moneylender in Singapore CANNOT advertise in Google Search, have a social media account, and create a fake website.
Based on Advertising Rules, effective 1st November 2011, licensed moneylenders are only allowed to advertise on three (3) channels:
- Business or Consumer directories (print or online media)
- Website owned by licensed moneylenders featured on the list of Registry of Moneylenders.
- Advertisement within the Interior or Exterior of the Office of a Licensed Moneylender – its business address is also reflected on the list.
Advertising beyond those channels means that you are dealing with an unlicensed or illegal moneylender.
6. They drafted false contract with illegal terms and conditions – which is not aligned with to Moneylenders Act and Rules.
FACT: A loan contract must indicate your repayment period, interest rates, and fees. Remember that a licensed moneylender can only charge the following:
- Effective 1 October 2015, a licensed moneylender can only charge a maximum monthly interest rate of 4%, applicable in both secured and unsecured types of loans
- The late interest rate is also a maximum of 4% each month of late repayment.
- Late repayment fee which is not exceed S$60
- An administrative fee not exceeding 10% of the principal loan when it is granted
- Total charges must not exceed or equal to the principal loan amount.
7. They offer loans without considering your income.
FACT: As a golden rule, remember that a licensed moneylender follows the standard loan amount based on the borrower’s income.
| Annual Income | Singaporeans/PR | Foreigners Residing in Singapore |
|---|---|---|
| Less than $10,000 | $3,000 | $500 |
| At least $10,000 and less than $20,000 | $3,000 | $3,000 |
| At least $20,000 | 6x monthly income | 6x monthly income |
8. You will be paying higher interest rates and there are hidden charges. You may also pay before your loan approval.
FACT: A licensed moneylender follows the standard rates for interest and fees. As mentioned earlier, a licensed moneylender cannot charge beyond 4% for the monthly interest. Also, late interest must not exceed 4% each month of late repayment. There’s no fee before your loan approval. A licensed moneylender can only charge up to 10% of the principal loan before granting your loan.
9. The lender is aggressive in letting you apply for the loan and maybe asking personal questions.
They may ask for your bank accounts, NRIC card, or SingPass. One of the reasons that they may ask you for this is there’s no collateral involved.
FACT: A licensed moneylender will not force you to apply for any type of loan. You need to follow the process. And they will never ask for personal information such as your bank accounts or SingPass.
10. They will not explain to you the terms and conditions of the loan. Also, they will not provide you with a copy of the loan contract.
FACT: A licensed moneylender will need to fully explain the terms and conditions in the language that you or understand, before signing the loan contract. They will make sure that you understand the loan agreement and will provide you with a copy.
You may also read what separates a licensed moneylender from an unlicensed one.
What would happen if you ended up dealing with a loan shark?
Dealing with a loan shark can be stressful. You may experience the following worst scenarios:
1. You’ll end up paying a higher interest rate.
Their goal is not to help but rather to earn more money from you. Since they are unlicensed, they don’t have limitations in adding interest to your loan.
They lure many borrowers since, in the first few months, they will offer very low-interest rates that can be lower than licensed moneylenders. In the next months, you’ll be paying interest rates that you have never imagined.
2. You and your friends and family will experience harassment.
Loan sharks are known for their disastrous action to force you to pay your loan. They will send you threats in the form of text messages. Also, they may send unsolicited messages to your friends and family members. For instance, a loan shark may threaten your family members they spread their financial credentials once you do not pay the loan.
3. They apply creative yet disastrous harassment tactics just to force you to repay the loan.
They will do what it takes just to make you repay. Also, they are very aggressive in forcing you to repay a loan with a soaring high interest. The worst thing is that they can even do is to apply violence and may even affect your neighbourhood.
So, what to do if the loan shark is after you? The next tips are dedicated to you.
How to Deal with Loan Shark Harassment in Singapore?
Every worst nightmare has its end. You still have the chance to escape those illegal lenders. They may be powerful and may use violence but don’t be afraid. There are still ways that you can do to stay away from them. And here’s how you can solve your loan shark problems.
1. Don’t Panic, Stay Calm.
Having a clear mind is helpful in making better decisions. If you’ve found out you are dealing with a loan shark, don’t panic, just stay calm. Remember you still can escape them. When you panic, it can cause anxiety and you might end up making the wrong decisions.
2. Call the Ah Long Hotline and Report Them.
The Police and the Registry of Moneylenders – Ministry of Law have been widely campaigning to fight for Ah long. You can call the Police at ‘999 or connect to the X-Ah long hotline at 1800-924-5664.
Source: Singapore Police Force
3. Report the Continued Threats to the Police
If a loan shark is still bothering you even after they have been reported, don’t hesitate to call the police. This may commonly happen since they want to get more money from you.
4. Stop Your Payments
As soon as you report a loan shark to the authorities, immediately stop your repayments. Since it is an illegal activity, there’s no need to continue your payment.
5. Get Help from Social Service Agencies
Aside from the Ah long and Police hotline. There are still authorities that can help you. Get help before it’s not yet too late. You may connect with Credit Counselling Singapore, the National Council on Problem Gambling and ComCare.
1. Credit Counselling Singapore
Phone:6225-5227
Website: www.ccs.org.sg
2. National Council on Problem Gambling
Phone: 1800-6-668-668
Website: www.ncpg.org.sg
3. ComCare
Phone: 1800-222-0000
Website: www.msf.gov.sg/comcare
Stay Away from Illegal Lenders
If you have decided to take a personal loan, a payday loan, or an SME loan from a licensed moneylender, always remember to verify first the identity of the lender. It takes only a few minutes to check the list of moneylenders.
Some loan sharks may become aggressive in inviting you to get a loan from them. The best thing that you can do is to report them to the proper authorities. Don’t be frightened and never believe in their false promises. Ignore their advertisements and messages. Also, please keep in mind not to give out your personal information such as NRIC, SingPass, or bank account details to them.
If it happens that you receive a cold call or any unsolicited messages about taking up a loan, you may verify by calling the anti-scam helpline at 1800-722-6688. Also, you may visit www.scamalert.sg to learn more about loan scams.
By the way, always remember this – coming from Unlicensed Moneylending Campaign:
Stay Away from Ah longs or You’ll have a Hell of a Life.
We all want not to live in a nightmare, so it’s better to start with choosing the right licensed moneylender.
