Unlicensed moneylending in Singapore
Unlicensed moneylenders, otherwise known as loan sharks are an ongoing and prevalent problem in Singapore. Over the years, loan sharks have resorted to new methods of harassing debtors as authorities increase enforcement measures against loan sharks and their runners.
Methods of harassment by loan sharks
In the past, loan sharks employed various methods in order to harass and embarrass debtors into repaying their debts. These methods included hanging animal heads on debtors’ doors, splashing or spraying paint, calling, texting and emailing debtors with the intention of intimating, blackmailing and embarrassing debtors. Unfortunately, on some occasions, neighbors of these debtors have also ended up as collateral or incidental victims.
Despite enhanced sentencing precedents set by the Singapore Courts, loan sharks have devised more creative methods which includes ‘hiring’ teenagers to carry out their illicit activities and continue to resort to violence against the debtors. Even when there are no physical interactions, there have been reported incidents of loan sharks setting up websites, Facebook pages or social media accounts to embarrass debtors and harass them for repayment.
Recent incidents of unlicensed moneylending in Singapore
The COVID-19 pandemic in Singapore has not deterred loan sharks and their runners from harassing their debtors. Despite the implementation of Circuit Breaker measures restricting movement around Singapore to carrying out of essential activities, loan sharks have started using food delivery services to harass people who owe them money. These loan sharks would place orders for food at the debtor or their relatives’ homes and demand repayment from them.
As loan sharks usually present themselves as reputable licensed moneylenders willing to lend a hand in a convenient and hassle-free way, people who are desperate, fall into these traps without even realizing it until they are trapped. Others choose loan sharks simply because they are unable to obtain a loan from banks or financial institutions due to bad credit.
Tech-savvy loan sharks have also advertised their ‘services’ online and or through messages to lure potential victims into borrowing from them. It is not uncommon for Singaporeans to receive WhatsApp or text messages offering ‘easy credit’ with “attractive” repayment options. The public have been advised not to respond to these messages or calls and to lodge a police report immediately.
What to do?
For those who wish to provide information relating to loan shark activates, they can call the police hotline on 1800-255-000 or 999 for urgent cases. Members of public may also call the National Crime Prevention Council’s “X Ah-Long” hotline at 1800-924-5664 if they have information on loan sharks.
Ultimately, Singaporeans are strongly advised not to engage with any purported services offered by loan sharks.
Protection from Harassment Act
If you are able to ascertain the identity of loan sharks or have been harassed by debt collection agencies, you may wish to consider applying for a Protection Order under the Protection from Harassment Act (Chap 256A) against these individuals. The difficulty in such instances is that loan sharks usually work under the cover of anonymity.
On the other hand, it is not illegal to operate debt collection agencies and there is no specific law regulating what debt collection agencies can or cannot do. It is not uncommon for debt collectors to employ intimidation tactics, violence, vandalism and harassment. However, Singaporeans should note these agencies are subjected to the criminal laws of Singapore though their business is legitimate.
Thus, if debt collectors have overstepped their boundaries and if you feel harassed, alarmed or distressed due to threatening, abusive or insulting behavior from debt collectors or if their actions have caused you to believe that unlawful violence will be used against you, you may wish to apply for a Protection Order under the POHA. Do consult a lawyer when doing so.
Prosecution under the Moneylenders’ Act
Since the enactment of the Moneylenders’ Act (Revised Edition 2010) (Cap. 188) in Singapore, the aim is to mete out harsher sentences for activities relating to unlicensed moneylending.
The Act specifies that no person/business shall carry on a business of moneylending unless he/she is licensed.
First-time offenders found guilty of assisting in the business of unlicensed moneylending will be sentenced to an imprisonment term not exceeding four years, and to a fine of not less than $30,000 and not more $300,000. An offender found guilty shall also be liable to be punished with caning not more than 6 strokes.
What activities constitute as assisting?
Under the Act, if it is found that a person had opened a bank account and gave away the ATM card along with the PIN, to be used to facilitate moneylending by an unlicensed moneylender, the person is presumed to have assisted in unlicensed moneylending.
Similarly, if it is found that a person had assisted in making bank transfers (ATM and/or online) on behalf of these unlicensed money lenders, they would be presumed to have assisted in unlicensed moneylending.
What about activities relating to harassment?
Likewise, the Act metes out harsh sentences to those who are found guilty of acting on behalf of unlicensed moneylenders to commit or attempting to commit acts of harassment. Activities such as being a runner, distributing pamphlets, acting as a lookout for the runners of loan sharks falls under this part of the Act. Lending your vehicle or driving the perpetrators to various locations for them to conduct activities in relation to harassment may also be offences as they assist loan shark activities.
First-time offenders found guilty of acting on behalf of an unlicensed moneylender, committing or attempting to commit any acts of harassment shall be punished with an imprisonment erm not exceeding 5 years, a fine of not less than $5,000 and not more than $50,000. The offender shall also be liable to caning of not less than 3 and not more than 6 strokes.
Taking out a Magistrate’s Complaint
Another avenue that is available to members of the public who have been harassed by these loan sharks is to make lodge a Magistrate’s complaint. However, do take note that as the offences under the Moneylenders’ Act has a prescribed maximum punishment of an imprisonment term that exceeds 4 years, the Public Prosecutor’s consent will have to be obtained.
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