Illegal Money Lenders on Facebook
Licensed Moneylending is a strict business in Singapore with various levels of restrictions for both online and offline presence. However, with the rise of digital media and the ease of digital advertisements, some moneylenders (illegal and legal) are turning to creative techniques to acquire more customers. Social media has made it an equal fighting ground for everyone. Illegal Money lenders on Facebook or unlawful lenders are now using social media to push creative new ways to attract customers.
Facebook Advertising Guidelines. No loan ads.
Facebook has 30 types of ad content that are not allowed (prohibited) to be advertised on Facebook. One, in particular, points out to the moneylending and finance industry.
“Payday Loans, Paycheck Advances, and Bail Bonds
Ads may not promote payday loans, paycheck advances, bail bonds, or any short-term loans intended to cover someone’s expenses until their next payday. Short term loan refers to a loan of 90 days or less.”
This strikes out as a strict advertising regulation for moneylenders, denoting payday loans and the likes of such are not allowed for money lenders on Facebook. Any forms of ads or sponsored content on Facebook for payday loans are not allowed on Facebook. Hence money lenders turn creative or get businesses to churn creative mediums for them.
Cloaking for Money Lenders on Facebook
This was a law raised in light of pressure to protect vulnerable users. Cloaking is a technique used by advertisers, spammers and companies to bypass the moderators and algorithms on Facebook.
A website or link is presented to the users that may appear legit, however, they are redirected to another version of the site or an illegal site to collect information. It may lead to misleading information on the website and taking up loans or financial products that might not seem favourable to them.
Companies like Facebook are trying hard now to protect their own users from harmful and deceptive financial products rather known as a “bad ad”. These bad ads can range from counterfeiting to phishing to promoting of illegal financial products, something that is not advertised.
Facebook algorithms are getting stricter and tighter, however, new creative ways of companies bypassing Facebook regulations are interesting.
The advertising regulation law for licensed money lender in Singapore
The Ministry of Law has a strict set of rules that governs a licensed Money Lender dos and donts in relation to marketing and advertising. These rules were set to ensure that the society at large is well protected and also due to the increasing negativism on the way financial products are being wrongly promoted.
What is not allowed:
Paid-for internet links
Paid-for internet links (also known as “sponsored links”) through search engines such as any paid-for links from search engines, appearing on internet search engine results pages or on any other Internet webpage.
This means that paid links on any online mediums are not allowed. Ads on Facebook are strictly not allowed in this case.
The Ministry Of Law has a set of rules that governs what a licensed Moneylender may or may not do in relation to marketing and advertising. Obviously, these rules were set in place for good reasons – to ensure that society is protected. We have extracted some of the key directions worth understanding.
Online advertisements that are not on the licensee’s business website or in an online business directory. Note: For the avoidance of doubt, advertising on internet social media sites (e.g. “Facebook”) or video hosting sites (e.g. “YouTube”) is not permitted.
This rule also adds on to the list that disallows online advertisements of social platforms.
Directories on online medium which consist solely of listings and advertisements of moneylenders and which are advertised in any manner or which are engineered in the same manner as described in paragraph
Advertisements in the form of Short Message Service (“SMS”) messages and e-mails sent to the general public, patrons of the licensee or former patrons of the licensee.
Still Bypassing Money Lender laws
However, even with tight restrictions by technology giants and by the local government laws, companies still find innovative ways to bypass such systems. One such technique is start-up companies try to cut into this space by offering a system to provide loan quotes to customers. These loan quotes serve as an offering to potential borrowers as they are gathered by various different companies. These companies are in the umbrella of the startup and not publicly known. This shields illegal money lenders on facebook or even legal money lenders that might resort to such techniques to acquire new customers.
Hence a word of caution, always check and be careful of what you might be in for. Read the fine print, and there’s be sure of the laws behind borrowing money. Also, ensure that you have a firm grip on your financials and spendings.