How To Deal With Loan Shark Harassment In Singapore: 5 Solutions For You
May 7, 2021
The official authorities in Singapore warn people never to get tangled with loan sharks. These illegal money lenders may promise you immediate loan amounts, but these come with high risks. If you can’t reimburse them, Ah Longs will threaten and harass you.
Many Singaporeans who can’t secure bank loans fall prey to loan sharks. Some of them will actually trick you into believing they’re legitimate. For your peace of mind, check if your moneylender has a MinLaw authorisation.
Remember that loan sharks are vicious. Some go as far as threaten to kidnap your children, while others use physical violence. You never know what they will do.
That’s why you should know how to spot them and how to deal with them effectively. Keep reading.
How Do I Know If I’m Dealing With A Loan Shark In Singapore?
The Ministry of Law in Singapore outlines various obligations for licensed moneylenders. If your creditor doesn’t follow these rules, chances are they’re a loan shark.
1. Ah Longs Use Illegal Advertising Channels
Licensed moneylenders in Singapore can’t advertise with flyers, commercials, or social media ads like other companies. Besides, they’re never supposed to contact you directly to discuss potential loan packages.
The Ministry of Law allows moneylenders to use just the advertising channels below:
– Business directories
– Consumer directories
– Their website
– On their company’s building, both inside and outside
Loan sharks will target you with personalised messages on your e-mail and phone. They may also use outdoor advertising, like flyers and posters. Some loan sharks will hang pig heads outside of your home or workplace.
2. Loan Sharks Promise Huge Amounts
You may already know that legal, financial institutions in Singapore operate background checks before approving loans. They verify your identity, address, income, and credit rating.
The last two factors are why some Singaporeans get their loan applications rejected.
You may think this is unfair. After all, people with small incomes and low credits need more financial assistance.
As such, you can only borrow up to $3,000 if your income is below $20,000/year. If you’re earning more than that, your loan should still be less than six times your monthly salary, according to MinLaw. There is a loan limit as they take your repayment ability into consideration.
Foreigners have it rougher if their incomes are below $10,000/ year. In this case, they can only borrow $500.
Conversely, loan sharks claim to lend you as much as you want. But, they have enormous interest rates. You will end up in never-ending debt.
MinLaw restricts legal lenders to the following charges:
– Maximum 4%/month interest
– Maximum $60/month late fees
– Maximum 10% of the principal amount for administrative purposes
– The price of a legal suit if they sue you for loan defaulting
These charges cannot go above your initial loan amount.
Of course, loan sharks don’t follow these rules. Some are even known to ask for a 50% interest. Besides, Ah Longs may ask for full reimbursement without notice because they don’t follow a strict repayment schedule.
3. Ah Longs Demand Pre-Loan Fees
Another sign that you are dealing with a loan shark is that they ask you for pre-loan approval fees.
It goes something along the lines of, “please transfer us $500 to confirm your bank account for loan approval”.
This trick is the oldest in their books. Pre-loan fees sound easy to refuse, but loan sharks know how to tempt you with them.
For instance, they’ll ask for a few hundred dollars to approve your loan faster. Or, they’ll say that a 10% advance will give you access to a more considerable amount. Remember: All these fees are illegal.
Licensed moneylenders are allowed to ask for a 10% admin fee, but only after signing the contract. They will deduct this fee from your loan amount.
4. Loan Sharks Don’t Make Contracts
Loan sharks don’t usually draft contracts. They typically agree to lend you the money via calls or texts. They’re also pretty vague about installments and tenure. No paperwork, nothing to protect yourself with.
But some may trick you with poorly drafted contracts. Here’s how you spot one:
– The contract doesn’t outline you and your lenders’ rights and obligations
– Your creditor didn’t ink it
– You don’t receive a copy
– You don’t receive detailed explanations
– Some information is missing (e.g., tenure, interest rates, fees, instalments)
– There’s no info about a breach of contract
– The contract is blank or incomplete
– You’re not signing this contract at the moneylender’s place of business after he or she conducted due diligence
– The moneylender claims they should hold on to your ID and passwords as collateral
5. Ah Longs Are Not Above Violence
Licensed moneylenders in Singapore have to follow a strict code of conduct. As such, they must treat customers with full professional courtesy at all times.
Loan sharks, by contrast, will always find a reason to justify their violence or harassment. However, remember that there’s never a good enough cause for brute force or threats.
Loan sharks are illegal moneylenders who will use unfair practices, though. They can harass you and your loved ones. They can call you at home or work or threaten to expose your financial situation. Some are not above vandalism or assault, either.
Also, loan sharks can use some of their debtors to do their bidding for them. This is how loan shark runners come about.
How To Handle Loan Shark Harassment In Singapore
Taking a loan from Ah Long is never the right solution. Even if things are ok for you now, your problems will escalate without warning.
Here are five options to consider:
1. Ensure Your Moneylender Is Licensed
You can access MinLaw’s list of licensed moneylenders here. Don’t use false links and don’t trust in your moneylender’s seemingly legit website.
Also, don’t confront your loan shark about it.
They’ll lie and claim that MinLaw has an incomplete database. They may also say they’re not in that database because they’re new on the market or because their trade name is different.
Some can even send you a fake link to a supposedly updated list of moneylenders!
2. Contact The Authorities
Call or file an online complaint with Singapore’s police.
|999||Police number for emergencies|
|1800-255-0000||Police hotline for crime-related info|
|1800-924-5664||X-Ah Long hotline|
|1800-2255-529||Registry of Moneylenders|
|https://www.police.gov.sg/I-Witness||Filling an online complaint to the police|
Use those numbers above whenever you notice the tell-tale signs of a loan shark. It’s best to catch them early on, so don’t wait to be harassed or injured. Call the police as soon as you notice illegal advertising or receive an incomplete contract.
Pro tip: Change your phone number and block the Ah Long on social media.
Remember that loan sharks have innovative ways of contacting you. They know where you live and where you work. And, if you’ve already done business with them, chances are your contact details are already released in the loan shark network.
Other illegal lenders contact many victims who can’t repay a loan shark. Their loans seem tempting, but they ultimately engross you in more debt. For instance, one woman’s loan skyrocketed from $20,000 to $400,000.
3. Don’t Cave Into Threats
Loan sharks’ threats work because people feel like there’s no way out for them. Ah Longs may threaten to come back for you if you call the police, for instance.
Calling the authorities is your safest bet, though.
The police will keep an eye on you and protect you from the loan shark. Plus, you contribute by disallowing loan sharks to scam others!
4. Stop Paying Your Illegal Loan
Ah Long loans are illegal. Therefore, repaying those loans is unlawful.
But loan sharks don’t know you know that. They’ll claim to call the authorities themselves if you don’t reimburse them.
Remember, that’s a blatant lie. Loan sharks will never call the police, but you should do that immediately. Besides, don’t forget to change your number and warn your close ones about the potentially dangerous loan shark.
5. Contact Social Service For Extra Help
It isn’t easy to recover after taking a loan from loan sharks. We understand that. Many people feel like there’s no way out, which means they get deeper into financial problems.
We understand that it was your financial worries that sent you to a loan shark. We also understand that your debt may be more significant now.
That’s why you need psychological assistance as well as money management advice. Here are some top-notch social services in Singapore to contact:
|Credit Counselling Singapore||6225 5227|
|MSF ComCare||1800 222 0000|
|Association of Muslim Professionals||6416 3960|
|Adullam Life Counselling||6659 7844|
|Arise2Care Community Services||6909 0628|
|Blessed Grace Social Services||8428 6377|
|One Hope Centre||6547 1011|
|Silver Lining Community Services||6749 0400|
Where Can I Get Help For My Debt?
There are many alternatives to get out of debt. You can ask your friends or family. You can try a peer-to-peer lending platform, rent a room in your home, or start freelancing.
If you need faster solutions, here’s what we advise:
While licensed moneylenders sound scary, they are legal financial institutions and will never overcharge or harass you. You will receive official loan contracts and complete your loan in the stipulated, affordable installments.
The most important thing is that licensed moneylenders will not hard-sell you loan packages. They will ensure that the loan amount aligns with your repayment ability. If you are interested, feel free to speak to our friendly staff now!