How to fight Singapore loan shark harassment

Open palm with ‘stop loan sharks’ stamp alerting us about Singapore loan shark harassment

Who are loan sharks?

As the name suggests, sharks are predatory creatures that feed on others. This is the reason why Ah Longs or Loan Sharks are associated with them as they prey on individuals with unfair practices and violent behaviour. Singapore loan shark harassment activities are still on the rise despite the introduction of the Moneylenders Act Singapore in 2008.

How to identify loan sharks

Legal lenders are registered under the Ministry of Law and regulated by the Moneylenders Act Singapore. Singapore loan shark harassment involves illegal activities used by loan sharks for debt collection.

Find the best tips on how to spot illegal money lenders to avoid Singapore loan shark harassment.

1) Illegal advertisement methods

If you receive a loan offer via SMS, WhatsApp, email, and/or social media, chances are they are illegal money lenders in Singapore. The Ministry of Law has banned such outreach activities for legal money lenders, who can only advertise on their website or display banners at their office premises.

2) Not registered with (ROM)

The Registry of Moneylenders (ROM) oversees the registration of all licensed money lenders in Singapore. They ensure that only qualified personnel enters this industry via a stringent screening process.

3) Generous in the loan amount

They will offer a huge loan amount without checking your credit scores, monthly income, employment status, and proper identification documents. 

4) Exorbitant interest rates

Illegal money lenders in Singapore will go to great lengths to victimise consumers. Legal lenders have to abide by these rules:

  •     Maximum interest rate is 4% per annum
  •     Maximum monthly late payment fee is $60

5)    Non-existence of physical office

Illegal money lenders in Singapore operate remotely and do not have a registered address. All licensed money lenders in Singapore are required to invite their prospective clients to their physical office before giving out any loans.

6) Random processing fees

Licensed money lenders will charge a processing fee which is capped at 10% of the loan amount when you secure a loan. Loan sharks will impose extra fees indicating a faster approval process.

7) Abusive and violent behaviour

Illegal money lenders will turn to violence and abusive behaviour in most of the Singapore loan shark harassment cases. Legal money lenders, on the other hand, will act professionally and negotiate on revised payment schedules. 

8) Unreliable loan contract

Licensed money lenders provide a comprehensive loan contract with the following information:

  •     Loan amount
  •     Repayment schedule with the loan tenure
  •     Interest rates
  •     All other fees
  •     Legal clauses in case of default payments

Loan sharks tend to issue a blank contract with only the loan amount in writing. 

How to fight against loan shark harassment

1) Stop payment immediately

Once you realize that you are dealing with loan sharks, stop payments immediately. Just bear in mind that these are illegal money lenders impersonating legal ones.

2)    Get assistance from social service organisations

Borrowers can turn to the social service agencies listed below for credit counselling:

3)  Report them to the relevant authorities – Police, ROM

The public can call the police X-Ah Long hotline at 1800-924-5664. Alternatively, a complaint can be lodged with the Registry of Moneylenders at 1800-225-5529 regarding any Singapore loan shark harassment.

4)    Avoid replying to unsolicited messages

In the first instance, do not reply to any loan offers via SMS, WhatsApp, or a phone call. It’s better to be safe than sorry!

 New tactics used by loan sharks

1)    Fictitious food delivery order

This is the latest method used by illegal money lenders in Singapore to harass borrowers. They would place a massive food order online pretending to be the customer and demand repayment from them. 

2)    Social media 

In July 2021, 166 people were arrested for their involvement in Singapore loan shark harassment activities. The Singapore Police Force advised the public not to respond to any unsolicited advertisements on social media platforms and report them as spam.

Protection from Harassment Act

If you are able to identify the loan sharks, you may apply for a Protection Order under the Protection from Harassment Act (Chap 256A) through a lawyer. In most cases, it’s tough since these loan sharks operate anonymously.

Moneylending Act Singapore

Under the Moneylenders Act Singapore, first-time offenders would be sentenced as follows:

  •     imprisonment term not exceeding 4 years 
  •     fine between S$30,000 and S$300,000

·      up to 6 strokes of the cane

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