How Not To Be Tricked By A WhatsApp Money Lender

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How Not To Be Tricked By A WhatsApp Money Lender

August 5, 2022

Money lending scams are becoming more common in Singapore. One of the most recent scams is the WhatsApp money lending scam. It preys on people who are desperate for cash and who need a quick loan.

Here are some ways you can avoid becoming a victim of such a scam.

How A WhatsApp Loan Scam Reels In Potential Victims

WhatsApp loan scams are rising in Singapore, with more people falling victim to fraudulent loan offers on the messaging app. They typically involve promises of quick and easy loans. Here are some ways a WhatsApp loan scam may operate:

  • Scammers may approach you via WhatsApp, or even Facebook, SMS, or email with a link from a fake website claiming they are a branch of a licensed money lender.
  • They may ask you to send a given fee for your loan to be approved once you indicate your interest in borrowing money from them.
  • If you fall for their tricks and send them the loan approval fee, the scammers stop texting you, leaving you without the promised loan.
  • Or they may harass you if you fail to pay the initial deposit before the loan is approved or make subsequent repayments. They may even threaten your family members or friends.

Signs Of Illegal Money Lenders Or Loan Sharks

There are various red flags to take note of when it comes to illegal money lenders. Here are some.

They do Not Have a Physical Office Address or Landline Number

Licensed money lenders in Singapore have a physical office address and landline, which they are required by law to maintain.

If your lender does not have these two things, it is most likely an illegal scam operation.

They Are Not Registered With the Registry of Moneylenders

All licensed money lenders in Singapore must be registered with the Registry of Moneylenders. You can check the list of licensed moneylenders on the Ministry of Law’s website.

If the lender you are dealing with is not on the list, they are not a licensed money lender and probably a scammer.

They Offer Unusually High Loan Amounts

Unfortunately, scammers are everywhere and will take advantage of your trust. They may promise to offer you a much higher loan than the amount usually offered by actual licensed money lenders.

They Will Ask You to Transfer a Deposit For Loan Approval

Legally, money lenders cannot take a deposit for loan approval because it indicates that the lender may not have your best interests at heart.

Hence, the request for a deposit is definitely a red flag that something is wrong.

You Won’t Receive the Money After Sending the Deposit

A licensed money lender will never ask you to send any deposit before it starts processing your loan application. But a loan shark or illegal money lender will.

They Will Harass You For More Money

The Ministry of Law regulates licensed lenders and stipulates that they cannot threaten or harass borrowers. But there are no such laws governing loan sharks or unlicensed money lenders.

How A Licensed Money Lender Operates

Licensed money lenders follow the rules and regulations to offer reliable lending services to their borrowers.

Here are some ways to tell if you are dealing with a legitimate money lender:

They Will Never Make Cold Calls Or Put Ads Online

A licensed money lender will never call or text you out of the blue. Nor will they leave you random WhatsApp texts or Facebook messages offering personal loans. If this happens to you, it is a scammer trying to trick you.

They Will Have A Registered Business Name And License Number

Singapore’s money lending industry is tightly regulated, meaning that all licensed money lenders must be registered with the government.

Their business names and license numbers must also appear prominently on their websites.

Licensed Money Lenders Will Verify Your Identity at Their Physical Offices

When you visit a licensed money lender’s physical address, they will verify your identity with an NRIC.

If the money lender does not ask to see this document, it can be considered illegal. Illegal money lenders charge interest rates as high as 26%.

They Will Give You A Copy Of The Loan Agreement

Licensed money lenders provide copies of all agreements made during business transactions, including rate information (such as late fees), repayment periods, and loan duration.

They Will Give You the Right to Cancel the Loan Agreement Within One Day

You have a right to cancel the loan agreement within one day of signing it.

If you’ve already received your money, return it so that they can issue you an official cancellation certificate and refund all fees associated with the procedure.

You Will Never be Asked to Pay for Your Loan to be Approved

A licensed money lender will never ask you to pay for your loan approval.

You should only repay the fees stated in the agreement. If a deposit is requested even before the loan is approved, it’s not legitimate.

How to Protect Yourself From WhatsApp Loan Scams

Scammers have developed various tactics to lure you into borrowing money from them. To protect yourself from WhatsApp loan scams, you need to do the following:

Report And Block Their Phone Numbers

If a money lender offers to loan you money on WhatsApp, you should block its phone number. You can also report them to your mobile service provider or WhatsApp so they don’t continue scamming other people.

Never Reveal Personal Details

If a money lender contacts you on WhatsApp, never reveal personal details such as your NRIC number, address, or bank account details. Scammers can use that information to steal your identity or commit other crimes.

Do Not Respond To Loan Offers

If you receive an unsolicited loan offer from an unknown number on WhatsApp, the best thing to do is ignore them and not respond. Do not engage with the person in any way, as they will only encourage more contact.

Call The Police

You should reach out to the police if are a victim of a WhatsApp loan scam or know someone who has been. You can also make a report online at the Singapore Police Force website.

Making a report will help to stop the scammers and prevent other people from being scammed on WhatsApp.

Only Borrow From Legal Money Lenders

It’s important to only borrow from licensed money lenders in Singapore. You can find a list of these lenders on the Ministry of Law website or visit them at their physical addresses, where they will verify your identity using your NRIC before providing any services and loans.

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