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Illegal Money Lending Activities in Singapore: Learn about remittance firms creating illegal loans

Illegal Money Lending Activities signs: Remittance firms offer loans

Illegal money lending activities seems to have another new scheme involved. This came in the form of remittance firms providing cash advances with interest to maids. 

Illegal Money Lending activities

Illegal money lending activities was seen in a remittance licensee, Toast Me, which was providing a special form of cash advance with interest to maids. In one contract, the firm charged a maid 10 per cent interest for a loan amount of $700. Only $630, was issued to her after a “first-time fee of $70” was deducted. However, this format of money lending can be considered illegal as it is exploiting a loophole in the regulation systems.  As the primary goal of remittance firms is to receive money and transmit it, as compared to lending money, which is the role of licensed moneylenders

A new prohibition against illegal money lending activities for remittance firms will be in place by Sept 10 to stop loan activities. The new prohibition will not affect existing loans, including restructured and refinancing loans. 

The rise in an increasing number of foreigners borrowing from licensed moneylenders, from 7,500 for the entirety of 2016 to 35,000 in just the first half of 2018.

It was mentioned by industry observers that it was unusual for remittance firms to be offering loans as the priority is to receive money for the purpose of transmitting it overseas but noted that some remittance firms might be exploiting the loophole since they are not licensed moneylenders under the oversight of the Ministry of Law. 

Loan caps and tighter regulations have been aimed at protecting foreigners who are living and working here in Singapore. However, this has led to some borrowers to turn to unlicensed moneylenders for sources of loans. 

The new prohibition notice was issued before the new Payment Services Act comes into force. In the upcoming Act, companies that are offering payment services such as remittance will not be allowed to grant loans to individuals. 

The current Payment Systems (Oversight) Act and the Money-changing and Remittance Business Act will both be revoked Payment Systems (Oversight) Act and the Money-changing and Remittance Businesses Act will both be repealed when the new legislation takes effect next year.

Pastor Billy Lee, executive director of Blessed Grace Social Services, was quoted to have received distress calls from maids with multiple debts and had handled 110 instances of such cases who had taken loans from Toast Me. Some had even lost their jobs here due to turning to illegal money lending activities and “Toast’s aggressive collection tactics”. Sending letters of demand addressed to their employers and harassment messages. 

He has urged the authority to stop such illegal money lending activities immediately “to prevent Toast me from aggressively advertising their credit facility to foreign domestic helpers who have reached their borrowing cap of $1,500 with the licensed moneylenders”

Harassed online by Loansharks? Use licensed moneylenders instead!

Harassed by Loansharks ‘大耳窿’? Use Licensed Moneylender!

The digital age has certainly changed the way business is done. And the illegal moneylender (loansharks) have taken it to new heights. We at Empire Global take a look at how the industry is changing rapidly.

Harassment Online: Name Shaming

Loansharks are now using social media to take their “Owe$Pay$” threats online. One creates a fake account that replicates the borrower’s with similar name and befriends everyone that he knows. And then the big hit comes whereby the loanshark starts placing posts on the account.

They even use postcards with pictures of the victim’s identity card, plastered with O$P$ and plastered them onto the fake account. This is just one such antic being used by them.

By name shaming and cyber bullying the borrower, the unlicensed moneylender gets to publicly let the victim’s closest ones know about his borrowing issue.

Help Yourself from Illegal Moneylender

Firstly, the law is on your side in an online bullying case. Facebook complaints falls the Protection from Harassment Act (POHA) because he had claimed the content on Facebook was false.

Secondly, under the Moneylenders Act, any person who, acting on behalf of an unlicensed moneylender, commits or attempts to use any threatening, abusive or insulting words, behaviour, writing, sign or visible representation, or commits any act likely to cause alarm or annoyance to his borrower or surety, any member of the family of the borrower or surety, or any other person, may face up to five years in jail, a fine between $5,000 and $50,000 and is also liable to get caned.

With the police clamping hard on harassment cases coupled with the use of modern technology plus social media, the police have come up with alternatives to get the public at large to help them.

Posting images of loanshark harassment, with their deeds online, the police appeals to the public to turn n such offenders. Such as Liu Yimin Lynnette, 28, who was charged in court facing seven charges of splashing red paint on doors and pasting envelopes with “O$P$”, the unit numbers of the borrowers, and a mobile number on the walls beside the units.

The young woman (above) whom the police were looking for in relation to loanshark harassment has been charged in court. -- PHOTO: SINGAPORE POLICE FORCE

The young woman (above) whom the police were looking for in relation to loanshark harassment has been charged in court. — PHOTO: SINGAPORE POLICE FORCE

News publishers such as AsiaOne has taken this another step further by showing a map of the money harassment cases (Loanshark Harassment Hotspots) occurring in Singapore. These are public information gathered from SPH news sources to give the public a better look at the harassment cases by illegal moneylenders.

Borrow from Licensed Moneylender Instead

Simply avoid all these harassments that could ruin your name by going to proper licensed moneylenders instead. There are limited licensed moneylenders and every year it becomes harder for businesses like us to maintain the moneylender license.

This is due to changing policies that improves the safety nets of borrowers. We encourage these moves by the government no doubt as it makes things smoother for us.

With strict regulations by the government and heavy punishments for licensed moneylenders if they made offences. Hence borrowing from licensed moneylenders make a better choice.

Negotiations between lending officers becomes easier too. Tell us your concerns and we can help you.

Illegal Moneylenders Scam Alert

Watch Out! Illegal Moneylenders & The Ah Long Scams

Anyone catching up with the World Cup 2014 recently? We at Empire Global certainly have. Have you bet on a soccer match before? Know of friends who betted on sports and lost heavily? We believe this is becoming a norm to us all.

Rise in Illegal Moneylenders

If you have been catching up on our local news, there’s been a rise in local publications and awareness campaigns on punters borrowing from illegal moneylenders or loan sharks (also known as Ah Longs) to finance their gambling habits.

They take up high risk loans and some get conned into scams led by these illegal moneylenders. This shows the increasing rise in illegal moneylending and the risk awareness that the authorities are trying to put up front. Punters are being gamblers still delve into the habit of gambling.

Caution!!

A word of caution upfront: if you ever get caught up in borrowing from illegal moneylenders, it will be a bottomless pit of debt. Please be careful! Always check the source and seek advice or borrow from legal moneylenders instead.

As people get uptight about their money, they start borrowing or listening to any source that seem reliable. We have cases whereby borrowers have sought out illegal moneylenders that seemed legitimate, but yet ended up in even higher debts.

Read more on 7 Great Tips to identify legal moneylenders vs illegal moneylenders

 Rise of Technology And How You Are At Risk

With technology being easily available to all plus all everyone is getting on-board with social media, it has become easier for syndicates to retrieve all your private information and use it to their advantage. As time passes, these lenders get smarter and better hidden.

3 Rising Scams Run By Illegal Moneylenders or Scam Syndicates

Let us introduce to you 3 rising scams that have been run by illegal moneylender scam syndicates.

Scam No. 1: The Threatening Letter

Although this is seldom reported these days, but it was once at its peak.

Illegal Moneylenders Syndicate: Threatening Letter Scam

Illegal Moneylenders Syndicate: Threatening Letter Scam

A simple letter will reach your mailbox with similar content such as “ “We don’t want to disturb your family, neighbours or vehicle… Call this number… (dinosaur). If no return call, we will take action (last warning).” Some letters like the one shown will just plainly threaten others into fear.

You must be wondering how did the syndicate gotten hold of the address. This is a harassment and a scare tactic that the illegal moneylenders deploy.

Well, there are a couple of scenarios whereby this could have happened. It could be a simple contest or survey whereby your personal details have been leaked. The government has taken strong approach on privacy protection this is done through PDPC.

Read more on: DNC Registry Do-not-call List: Goodbye to unwanted calls and messages

Or in the worst case, a borrower has misused your information to borrow money and placed you as a guarantor. The mistaken identity that borrowers use is commonplace, and it really disrupts your personal life as illegal moneylenders are all out to harass and embarrass you.

Read more on: New Loan-shark tactic or scam?

Scam No. 2: Frightening Phone Call Scam

Illegal moneylenders are now using your own mobile number to contact you. Using abusive language and forcing innocent parties to repay for loans that they did not borrow.

  1. They target people and send threatening calls to tell them to deposit money into their account. They play on people’s psychology by threatening harm on their family or loved ones.
  2.  They target people who have previously borrowed money from illegal moneylenders. The unscrupulous ones will sell or leak information that scammers can use. As these borrowers will less likely report to the authorities, they are the prime targets and are more willing to pay than face shame and embarrassment.
  3.  In addition, scammers make false loan claims of innocent victims and intimidate them to pay up unknown loans they had not taken.  These callers will follow up with continuous SMSes, threatening the family members of the victim.

Do check out this episode by Crimewatch SG, and the Ah-Longs scams that have been run by the syndicates.

Scam No. 3: SingPass Scam

Firstly requesting a SingPass ID Password is strictly forbidden by law. Illegal moneylender syndicate start to request SingPass on unknowingly victims by assuming fake identities of legitimate sources. With a SingPass access, scammers can gain access to personal information

Illegal Moneylenders Scam Syndicates request Access to Singpass Login.

Illegal Moneylenders Scam Syndicates request Access to Singpass Login.

The Battle Against Illegal Money Lenders

The battle against Ah Longs (illegal moneylenders) is long and hard. It has since intensified when NCPC and SPF joined hands to launch a nationwide campaign to eradicate them. There are now campaigns consisting of Roadshows, TVCs, billboards and awareness movements to educate the public about the dire consequences of borrowing from unlicensed moneylending syndicates (Ah Longs).

As licensed moneylenders, Empire Global has strongly supported the movements and advise our customers to practice due diligence and for some not to repeat the past borrowing mistakes they had with illegal moneylenders.

The above scam practices are unacceptable of licensed moneylenders. If you encounter such money lenders, you should report it to the Registry of Moneylenders.

We highly encourage you to share this information to your network to highlight the alarming scams that are run these days.

Read more on: Why borrow from licensed moneylenders

Help Take Action: The X-Ah-Long Hotline

The hotline is at 1800-X-AH-LONG or 1800-9-24-5664, and allows the public to provide information on loan sharks anonymously. If you are in trouble or see others in trouble, please, help to reach out to the hotline and help to take action.