Singapore is the world’s most expensive city. Being expensive is often good because investments and economic activity remain bustling with activity. On the other hand, it leaves behind some Singaporeans and foreign workers, leaving them at the mercy of loan sharks.
Loan shark harassment might sound like old news for many Singaporeans after the Moneylender Act of 2008. However, their activities remain high, with over 237 loan shark-affiliated suspects arrested for opening loan shark bank accounts.
Also known as “ah long”, Loan sharks exist because victims suffer from increasing living costs without raising pay. This reality results in these victims using off-the-radar solutions.
Loan sharks make their offers completely appealing and an “instant” solution, sugarcoating the future loan shark harassment and contact changes that can enslave unsuspecting borrowers-turned-victims in the future.
Why You Shouldn’t Work With Loan Sharks
Singapore has a rich history involving unregulated loan sharks running their high-cost and heart-wrenching racket all over the country. Despite their offers’ attractiveness and customer-friendliness, never work with loan sharks.
You’ll thank us later for following this advice and having avoided a world of hurt, trauma, and violence.
Completely Out-Of-Contract Loans
Loan sharks issue loan amounts within seconds, a decision-making process that banks avoid. Risk assessment is a crucial process for both banks and borrowers in money lending practices. Banks want to assess your risk profile.
Alternatively, borrowers place full confidence in their bank because they’re an established institution. Their contract with banks will circulate in the system, making it easy to recall and review in the future.
One form of loan shark harassment is hiding and eliminating these documents when convenient for the unscrupulous lender. You’re signing a contract that does not exist in circulation, making it difficult for legal services to aid you in the future. Plus, loan sharks can bend the contracts to their will to enslave borrowers.
Zero Cash Recovery Possibility
You can always get help from Singapore’s Police to prevent loan shark harassment and stop the criminal organization’s advances. However, the Police can only guarantee safety and can never recover the victim’s cash payments.
The amount you’ve paid the loan sharks in the last week, month or year is lost forever.
Tied To Criminal Organizations
Virtually all loan sharks are tied to Singaporean and international criminal organizations. This fact establishes their capability to provide huge loan amounts to victims, entangling them into an unpayable loan with ever-changing terms and conditions.
Loan shark ties to criminal organizations also explain their use of threats, abusive behavior, and violence to coerce victims into paying and avoiding help from Singapore’s law enforcement.
Red Flags To Help You Avoid Loan Sharks
An ounce of prevention is worth a pound of cure. This principle greatly applies in preventing loan sharks from sinking their claws into you. Both Singaporeans and foreigners must remember these seven red flags, allowing them to avoid harassment from unscrupulous lenders and loan sharks for good.
Not Registered to the Registry of Moneylenders
The Moneylender Act of 2008 allowed Singapore’s Ministry of Law to have a full grip on microlending and preventing loan shark activities.
The Ministry established The Registry of Moneylenders to oversee all licensing, testing, reviewing, and revoking licensed moneylender licenses. The Registry fully investigates a licensed moneylending applicant’s academic and social backgrounds. Doing this helps prevent licensing would-be loan sharks, allowing The Registry to increase Singaporean licensed moneylenders’ quality.
Therefore, you can assume that any moneylender cannot present their operating license number to be possible loan sharks. When you receive an offer, it’s best to avoid replying or at least review their operating license number in The Registry’s downloadable list of licensed moneylenders across Singapore. Remember, working with unlicensed moneylenders gives you no recourse when your financing turns south.
Guerilla Advertising and Unsolicited Outreach
It’s an obvious loan shark tell when you receive an unsolicited SMS or call that looks professional yet offers a high loan amount with an unbelievable, off-market interest rate. The loan shark’s goal is to surprise you with the possibility of borrowing such a high amount for less. It’s an obvious red flag because guerilla advertising and unsolicited outreach are illegal moneylending activities.
If you’ve received an SMS or chat message from an unknown party with an irresistible offer, remain suspicious because they’ll likely trick you into applying for the loan. Plus, the Ministry of Law bans any outreach activities for licensed moneylenders. They can only advertise through a “static” website without outreach campaigns and post flyers within their physical branch perimeters.
Gives You The ‘Amount of Your Dreams’
It’s always a huge relief when the bank approves your loan application. However, with loan sharks, it’s not the same case.
Loan sharks make their services convenient and accessible for borrowers to snare them into regularly paying for amounts they dictate. One way they do this is to give you the loan amount you want and beyond.
Banks reject your loan application or negotiate your loan amount because you have poor credit scores. Credit scores force many Singaporeans to borrow from loan sharks, and it protects both borrowers and lenders from high-risk leads that bring losses.
Banks lose money from high-risk borrowers. On the other hand, borrowers with poor credit scores and existing financial problems will have problems paying back higher loan amounts plus interest.
While licensed moneylenders make it easy to borrow money by deprioritizing credit scores, investigators greatly consider the borrower’s income and employment stability in deciding loan applications.
Skyrocketing and Abnormal Interest Rates
With government regulation, lenders have to follow rules that show links between their product interest rates and existing market valuation. For example, banks will always link mortgage interest rates to real-estate prices and existing Singaporean interbank borrowing (or SIBOR). We can assume banks have a separate derivative for personal loans, too.
However, a loan shark doesn’t have to play by any rules and regulations. They can set interest rates as high as possible. If borrowers question their derivation formulas, they won’t receive any answers. Loan sharks won’t bother responding to these inquiries because they can use violence and other abusive actions to coerce borrowers to follow.
Random Loan Processing Fees
Like interest rates, bank and licensed moneylender processing fees need root derivations that link their processing fee value to their financial product using market valuation. In doing so, all banks have a near-standard processing fee, while licensed moneylenders have a ceiling rate never exceeding 10% of the borrowed loan amount.
A loan shark can give borrowers the same rate. However, nothing stops them from charging the same amount as the loan amount, having borrowers pay double by the loan term’s end.
It doesn’t stop there because a loan shark can lend money with a processing fee that unfairly exceeds the total loan amount. Doing this elevates the total loan amount to a staggering figure, excluding interest rates.
Blank Contract Signing
Banks and licensed moneylenders must read you the entire terms and conditions through a representative. Then, the representative must ask for your signature on a waiver indicating you’ve fully understood their explanation.
In doing so, you can ask as many questions as you need until you completely comprehend your loan’s terms and conditions. Borrowers who fail to comply with rules often sign the waivers due to laziness.
However, a loan shark can issue a blank contract to you, including your loan amount in some cases. It sounds convenient until borrowers realize that loan sharks can bend the contract’s terms and conditions, loan amount, and other details to their will.
It’s against the law for banks and licensed moneylenders to issue your loan amount before conducting a credit background investigation and serving you the contract.
Crudely Abusive Behavior
If you fail to pay your loans with Singapore banks and licensed moneylenders, you’ll receive a notice asking you to pay your loans as soon as possible. Borrowers who consistently fail to pay their loans on schedule and in full can force lenders to submit a bankruptcy application without initially informing them.
On the other hand, loan sharks do not operate within the law. They use harassment and abusive strategies to keep their borrowers in line. Changing the borrower’s loan contract terms and conditions enslaves the latter to the loan shark, disabling them from fully paying their loan.
The only way out in this situation is to ask authorities for physical and legal protection against criminal organizations.
Ways You Can Fight Against Loan Shark Harassment
In this section, borrowers currently working with loan sharks can find the necessary resources to help them fight and protect themselves against illicit loan shark practices.
Do not reply to unsolicited messages via SMS, chats, calls
People need instant cash, which loan sharks can supply. However, anyone who does not think of long-term consequences always helps loan sharks thrive. Please don’t give in to offers you receive through SMS, chats, or calls because it’s illegal, and it only helps loan sharks establish their domain in the modern world.
Report Them To The Authorities
The Singapore police force has a dedicated department that aims to help Singaporeans and foreigners deep in the loan shark’s influence. If you feel you or anybody you know has worked with a loan shark, you can call the X-Ah Long hotline at 1800-924-5664.
Alternatively, you can file a complaint with the Registry of Moneylenders at 1800-2255-529. Singapore’s I-Witness reporting page is another way to help anybody you know to defend against loan shark harassment.
Singapore’s authorities can protect you against any other loan sharks because your mobile phone number, personal credentials, and other delicate information might have spread through Singapore’s underground loan shark network.
Learn How to Deal With Their Threats
Loan sharks can threaten you or your family with violence. Cases across Singapore have shown how ah longs have defaced borrowers’ business stalls or scandalously called them out in their workplaces. Today, they use the internet to harass and slander borrowers’ names, unable to pay their loans due to their extremely high interest rates.
Singapore’s police force can readily assist you against any physical threats. Plus, you can file cases against criminal lender assistants or “fronters” with punishments from the law, such as:
- Jail term of up to 5 years
- Fine of between S$5,000 and S$50,000
- 3 to 6 strokes of the cane
Paying your unscrupulous lender shows them that you’re still within their influence. Once you have identified your lender as a loan shark, you should stop paying them anything. Please report them to authorities immediately and hold fast until help arrives. Never give them a single cent.
Get Help From Social Service Agencies
If authorities can’t reach you on time, charity and social service organizations can legally represent you. Reach out to the following organizations and agencies to receive the help you need.
- 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
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