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Licensed Money Lender faces criticism in Singapore. A new set of woes to worry about.

Licensed Money Lender Facing Criticism in Singapore

The licensed money lender industry in Singapore has gotten its run of bad publicity for 2015 given the recent events occurred amongst debt collection. Debates have been brought up on how debt collection can be made better.

Licensed Money Lender Scene

This was due to a recent scene in the licensed money lender industry in Singapore when seven employees of Double Ace Associates confronted a stall owner at Funan DigitalLife Mall foodcourt and created a big scene during the busy lunch hour. All offenders were charged with unlawful assembly just last month.

Debt Collectors in Singapore creating a fuss at Funan Digital Mall Singapore

Debt Collectors in Singapore creating a fuss & harrassment at Funan Digital Mall Singapore

Licensing Debt Collection in Singapore

Debt collection in Singapore. Hired by licensed money lender.

Debt collection in Singapore. Hired by licensed money lender.

Licensed money lender hire debt-collection companies from time to time for long standing debts that they cannot handle and this incident highlighted on how a loan can go horribly wrong.

“Licensing the debt-collection industry could clean up its image, and clamp down on the use of harassment tactics” – suggested by Mr David Poh, President of the Moneylender’s Association of Singapore, has been backed by the Credit Collection Association of Singapore (CCAS).

This matter of debt collection has been raised in Parliament last month when MP Foo Mee Har mentioned whether debt collectors should abide by a code of conduct, and if the Government of Singapore would consider introducing laws that govern fair deb-collection.

Others have mentioned that should such a code of conduct be in place, there will be a lot of infrastructure that needs to be put up for case investigation. Hence the onus should be on the licensed money lender, to ensure their debt collectors do not use violence or high pressure tactics.

“Moneylenders found to have committed offences may have their licences suspended, not renewed or revoked by the registry,” Senior Minister of State for Law Indranee Rajah

Late Fee Charges by Licensed Money Lender

Late Fee charges by Licensed Money Lender

Late Fee charges by Licensed Money Lender

Late last year, an article about how a borrower got a small loan and incurred a large debt due to the late fee charges.

Suggestions have been made to cap the penalty late charges. However this has led to many licensed money lenders protesting that the new rules could kill their business.

This is why at Empire Global we always encourage borrowers to negotiate early and fully understand the terms involved. Terms from different licensed money lender vary greatly. All these could lead up to you getting into greater debt.

Licensed Money Lender Woes & The Review Committee

With the advisory committee proposing major changes of which a controversial interest rate cap of 4 percent per month has led to an outburst in the licensed moneylending industry.

Many licensed money lender in Singapore have mentioned that the cap will lead to borrowers not paying back instead. Without late penalty charges, it will be tougher to collect back their money.

Borrowers have a higher chance to default on their payments. Leading to lower profit margins by the money lenders.

The advisory committee basis on the proposed interest rates is also referred to prevailing interest rates charged by licensed moneylenders in jurisdictions like Hong Kong, Australia, Japan and Britain, which range from 1.5 to 4 per cent.

We at Empire Global are looking at ways to improve our infrastructure and to work with the interest rate cap. Hopefully, the Ministry of Law considerations on relaxing advertising restrictions on newspapers will be implemented.

Most definitely, we want to be geared up to in advance to follow through the new rules imposed.
Don't Be a Victim. Learn about these four financial scams today.

Don’t Be A Victim! Learn About These Financial Scams

We had previously talked about 7 great tips you can use to identify legal and illegal moneylenders. Read it if you haven’t, as it might just save you from heaps of troubles.

We at Empire Global greatly enforce the rules stipulated by IPTO and our loan officers always advise our customers on the proper loan terms.

A reminder, legal and licensed moneylenders do not send out SMS marketing messages. If you ever received one, it MUST be from an illegal source. But unfortunately illegal moneylenders aren’t the only problems that borrowers face nowadays.

There are always unscrupulous businessman and scammers who constantly think of new ways to trick you off your hard-earned cash. These usually come in the form of financial scams that are carefully disguised as legitimate businesses deals or easy cash. Falling into any one of these could mean landing yourself in huge debt or seeing your savings wiped clean.

4 Common Types of Financial Scams

Now let me quickly take you through these 4 most common type of financial scams and how to identify them with a help of a great educational video.

Ponzi Scam

Ponzi scams almost always lured victims with high short-term returns with low to zero risk, but things aren’t as good as it seems. Often victims will receive about 1-2 prompt returns on their investments (as advertised), but that’s as far as it goes.

The greatest Ponzi scam in Singapore was Sunshine Empire masking as a MLM business that promises extremely high returns. Lots of people around us at Empire Global had been duped by them.

Once the victims are convinced and hooked into investing more of their money, the scammer starts to disappear and becomes uncontactable.

Thus always remember the saying, “there is no free lunch in this world”. If the investment sounds too good to be true, or encountered such an attractive deal, do a research online (forums, news, government website) to prevent falling into such traps yourself.

Lottery winnings / Inheritance Financial Scams

These are one of the oldest scam out there. Typical a scammer will contact you about a huge windfall either through winning some lottery or inheritance.

These usually come in the form of an email/mail (usually very well written!), with proper letterheads, and promoting it as risk-free. This is to give you the perception that it comes from a legitimate source.

Once you bite onto the good news, they will then slowly bait you into transferring money as a “processing fee” or “handling fee” in order for them to transfer the winnings to you.

Phishing Scam

Phishing scams refers to scammers trying to impersonate as an existing legitimate business or government body to try to get your personal particulars or passwords etc.

Common ones are these online login website to your bank accounts. They develop a login website similar to those of the banks and trick you into keying in your personal data and passwords into the online form.

Hence, always ensure that the Bank login website that you are visiting is the correct and legit ones. Always check with the bank if you are unsure.

Illegal Moneylenders Scam

Today, we are also going to highlight another new financial scams scheme use by the illegal moneylenders in Singapore. If you think they only use SMS marketing to fake as legal licensed moneylender in their SMS message? You are wrong! They are more than just fake SMS marketing as licensed moneylenders.

In fact, there are even reported cases of scammers sending threatening SMS to their victims demanding for money that they have allegedly borrowed or payments that they have missed.

Read more on Watch Out! Illegal Moneylenders and the Ah Long Scams

What really forces the victims to comply is the scammer ability to identify them by their names and NRIC number. Which is then followed by a threat to the victim’s family members.

Once successful, the scammer will then instruct the victim to pay the money within an hour or less to a bank account. This is to prevent them from having the time to go seek for advice or help from other inclusive of the Police.

However, since the rise of such cases, the Singapore Police Force came out with some guidelines highlighted below that can help you avoid such financial scams.

  • Do not contact the senders of dubious messages or letters
  • Do not response to unsolicited demand for loan payments
  • Do not reveal your personal particulars such as Name, NRIC number, and address to unknown individuals
  • And always report to the police when such incidents happen.

You may just save you your hard earned cash and the agony of dealing with such incidents.

Here we are also sharing an infographic about financial scams around the World! Arm yourself and your families with this knowledge and prevent these from happening to you!

Infographic - Learn about financial Scams  happening around the world

Infographic – Learn about financial Scams happening around the world

7 Tips to identify legal moneylenders vs illegal moneylenders

7 Great Tips to identify legal money lenders vs illegal money lenders

Singapore – As with the ever-changing environment in Singapore, money lenders are moving into the heartlands to reach to a wider audience. This has led to a rise of illegal money lenders who want a piece of the loan industry. Every so often, a money lending company gets caught up in the news for malpractice or false advertising. This is why if you should need a money lender, you have to be smart about it.

7 Great Tips Compiled to identify legal money lenders

We have compiled seven important tips that one must be fully aware of prior to approaching a money lender. This will help you to identify the reliable legal money lender very quickly from these illegal and ill-practice ones.

Tip 1: Legal money lenders do not send SMS or perform telemarketing service

SMS is a great way of advertising, however in terms of loan services it appears like a spam service. Under the IPTO rules and privacy acts in Singapore, money lenders are not allowed to advertise their services in the form of SMS or telemarketing. Any company caught doing so will face harsh punishments by the government.

Some fake money lenders have started to copy wholesale the writing style of SMSes that banks send to customers, and use these SMSes as templates when they reach out to potential clients. They simplify copy and add-on their own phone numbers at the end of the message hoping to bait a borrower.

They even restore to using the names of legal money lenders and tricked potential borrowers into believing that they are the real deal and running a legit business.

Hence the strong emphasis that legal money lenders are not allowed to solicit for business via SMS. If you receive a SMS advertised with a Legal money lender name, DO NOT REPLY OR CALL.

Tip 2: Legal money lenders do not perform online bank transfers

Legal moneylenders do not perform bank transfer. Do not take up any offer for bank transfer when borrowing

Legal moneylenders do not perform bank transfer. Do not take up any offer for bank transfer when borrowing

There’s lots of articles and money lenders who assure instant bank transfer or advance cash via your bank account. These are usually illegal money lenders who want to avoid detection or the required paperwork to be done.

Legal money lenders will advise the borrower on the required paperwork, charges and require the borrower to visit the office. By doing so, it is a form of verification on both ends and further processing is done to facilitate the loan application.

Therefore, if a money lender offer instant bank transfer service, DO NOT TAKE UP THE OFFER.

Tip 3: NEVER, ever disclose your sing pass details over the phone

Singapore’s universal citizen login through SingPass contains a large amount about a person. It is very important that one should never divulge their own individual SingPass details to a third-party over the phone.

It’s a personal access account and illegal money lenders can do a lot with it It is part of the process to verify borrower income and working status in order to determine he/her ability to service the loan.

However, SingPass verification is done on-site personally and not disclosed over the phone.

Tip 4: Always research your money lender

First check onto IPTO website to see whether the moneylender is a licensed body. Check that they have a valid license number on their website or on their retail shopfront. Reason for doing so is that some illegal money lenders have resorted to mimicking or use  the names of licensed money lenders to advertise their services.

Anyone in a rush would have overlooked the details and end up getting a really bad deal on their loan or in the worst case get stuck in the loan. By then, even the authorities would have a hard time to rescue the situation. Look at their advertisements properly and ensure that the company being used is reflected properly.

Look for reviews made by people who have used the money lender’s services. This marks their service and real testimonials being given out. It is always important to find out more on a money lender first and ensure they provide the best service and advice before taking up a loan with them.

Tip 5: No need to provide income documents or meet face-to-face

Licensed money lenders have a physical approved office. In most cases, they would require borrowers to come down to collect their money face-to-face. This is part of the IPTO regulation to ensure that proper paper work and advice is done by the borrower before any loan is issued out to the borrower.

Hence, legal money lender will require you to pay a visit to their office to complete a hassle free paperwork and loan process within 15-30 minutes.

Tip 6: Legal money lenders operate from registered landline

The government has put in place many safety measures to help citizens and borrowers. One of which is that legal money lenders are required to use their registered landline whenever they advertise. Illegal money lenders are known to use mobile numbers or overseas numbers in their advertising materials.

Therefore, if you see an advertisement or calls from mobile number of oversea number to advertise for their loan services. These are 100% illegal money lenders. DO NOT TAKE UP THE LOAN OFFER!!!

Tip 7: Do not sign blindly

 

Do not sign an empty contract. Licensed money lenders must draft a written contract in a language that the customer understands.

Be careful of what you sign for. Do not sign blindly on any contract. Get the loan officer to explain to you.

Be careful of what you sign for. Do not sign blindly on any contract.

They must also explain the terms and conditions to the borrowers and ensure they understand all terms before signing. The terms and conditions must also be in line with the regulations found on the IPTO website.

If you see any unfair condition or term that is not in-line with the regulation, you can choose to walk away and not take up the loan.

In summary, read and understand before you sign. If not, get the loan officers to explain it to you.

Avoid being tricked

  • Legal money lenders do not send SMSes
  • Legal money lenders do not perform online bank transfers
  • Legal money lenders are licensed and required to be registered
  • Always conduct your research the money lender
  • Always meet face-to-face with the money lender
  • Always check what you are signing for and that the terms are understood
  • Never disclose your SingPass details over the phone
  • Never approach a money lender which operates from overseas or mobile number

There are lots of trickery that illegal money lenders resort to. As a consumer of any product, especially those related to money, one must understand the situation and be fully aware of the risks involved.

We hope that you do not have a bad experience in borrowing money, if so you can approach our knowledgeable loan officers who will be there to assist you. You can also write in to us or post a comment regarding loans or money lenders. We will be most happy to reply and assist you.

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