Illegal Money Lenders in Singapore

Illegal Money Lenders in Singapore

Illegal money lenders deal in cash, do not provide any paperwork and charge extremely high interest rates. They also often demand valuables like passports and watches from borrowers who cannot make repayments. If you have a problem with a moneylender, report it to MABS.

Licensed moneylenders are only allowed to advertise for loans via business or consumer directories, websites and advertisements displayed within or on the exterior of their premises. They are not allowed to use text messages or other forms of advertising.
Legality

A legal moneylender (also known as a geldverleiher in German, prestamista in French or preteur in Russian) is registered with a government-regulated financial agency and follows the rules set by the regulatory body. They are different from loan sharks, who operate outside of the regulations and charge exorbitant interest rates.

Licensed moneylenders also prioritize the security of their clients’ personal details and never hide contract and loan terms from them. They will always retain copies of original identification documents for verification and record-keeping purposes, but they will return the original documents to borrowers after their loans have been settled.

Additionally, a legal moneylender will never threaten a borrower or harass them. This is illegal in most jurisdictions, and only loan sharks engage in such predatory activities. Moreover, they are prohibited from advertising their services via social media platforms, WhatsApp messages or text messages, and must meet with borrowers at a physical moneylender’s office. This is to ensure that the borrower can understand the terms of the loan before making a decision to take it.
Fees

A legal moneylender’s fees cannot exceed the principal amount of the loan. They must also disclose their fees and charges to borrowers before they approve the loan application. Furthermore, they can’t charge you any interest rate or late fee that is higher than the maximum allowed by law. They should also not ask for collateral or threaten to confiscate your property. This is considered loan shark behaviour and is illegal in Singapore.

If you are not sure whether a lender is licensed, check their licence number on the Ministry of Law’s list of Licensed Money Lenders. You should also receive a receipt each time you repay your loan or pay any fees. Keep all receipts for your records and documentation. If you encounter unprofessional debt collectors, report them to the Registry of Moneylenders (ROM) immediately. They are not permitted to send you hate mail or spray things on your door or neighbours’ doors – this is a clear sign of loan shark behaviour and they could be in breach of the laws against harassment.
Complaints

If you have a problem with a money lender in Singapore, it is important to act quickly. By lodging a complaint, you can protect yourself against fraud and unjust dealings. It is also crucial to know what situations warrant a complaint, how to lodge it, and the steps involved in the process.

Licensed moneylenders should follow the law and not harass their customers in any way. However, some lenders still use harsh tactics to collect payment. These companies are known as loan sharks and should be reported immediately.

The law states that moneylenders can charge a maximum interest rate of 4% per month. However, some lenders are known to impose much higher rates. In addition, some moneylenders secretly include hidden charges in their contracts and make borrowers pay more than they expected. In such cases, a borrower should report the moneylender to the Registry of Moneylenders. They should also be aware that moneylenders are not allowed to visit a borrower’s home or place of work.
Licensing requirements

Money lenders are licensed and regulated by the state or country where they operate. They are also obligated to abide by the laws that govern their operations and lending requirements, including interest rates. If a legal moneylender doesn’t follow the law, they may face penalties from the government or be banned from operating altogether. They may also employ debt collectors to retrieve loans if the borrower can’t pay back the debt. However, a debt collector can’t send hate mail or spray paint your house, and they can’t confiscate your ID.

It’s important to consider whether you can abide by the contractual terms of a moneylender’s loan contract, taking into account your income and financial obligations. Additionally, you should never take out more than one loan at a time, because it can put you further into debt. Also, a moneylender shouldn’t offer you top-up loans or withhold part of your original principal loan payment. If they do, you can report them to the police.

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