While looking for a licensed money lender near me, I was quite surprised to come across news about the rise of scam loans in Singapore. The statistics reported by police authorities indicated an increase of 83.2 %; the numbers rose to 1,772 in 2019 from the previous year’s 967 total. In fact, next to ecommerce fraud, scam loans are the second most common mode of financially victimizing Singaporeans.
Actually scam loans in Singapore can be avoided by having at least an idea of the basic money lending rules and conditions that licensed money lenders are required to follow, in order to preserve their lending authorization.
Apparently, those who were victimized did not check if they were dealing with a licensed money lender, or have little knowledge of lending practices stipulated as legal under the country’s Moneylenders Act. Checking out the legality of a money lender is easy since information can be obtained through the up-to-date list of licensed money lenders published by the Registry of Moneylenders in the Ministry of Law website.
Extension of the COVID-19 Circuit Breaker Measure Could Make Unemployed Singaporeans Vulnerable to Scam Operations
Currently, many of us in Singapore have either been retrenched or forced to go on a no-pay leave, as a result of the “circuit breaker” measure implemented last April 07, 2020. Even if we received some form of financial aid through the government’s COVID-19 economic stimulus package, the extension of the “circuit breaker” period to up to June 01, 2020, has placed many citizens in a precarious financial condition.
Criminal elements will likely exploit such conditions by offering to grant too-good-to-be-true e-commerce offerings and quick loans, via SMS messages or telemarketers. Knowing the basic money lending rules is important even when dealing with a money lender who purports to be licensed. That way, we can protect ourselves against scam loans and predatory lending methods that lead to a financial trap.
Key Points to Consider When Choosing a Money Lender
First off, licensed money lenders are prohibited from making cold calls or initiating loan offers by calling up, or sending texts and/or email messages to potential borrowers.
Have awareness that licensed money lenders are allowed to place advertisements only in consumer or business directories found on print or online media, in the licensed money lender’s website and in the money lender’s place of business.
Be wary of those who will not require submission of documents, because money lenders are required to verify the identity, place of business and residence and other related details about a borrower, before approving a loan.
Requiring payment of deposit and facilitation fees, as well as asking a borrower to provide his or her SingPass, NRIC number, and details of deposit account and credit card/s are all strictly prohibited. That being the case, a licensed money lender cannot include them as requisites for loan approval.
Moreover, licensed money lenders are required to grant loan approvals only in their official places of business. They are also obligated to fully explain to a borrower, the terms and conditions governing the approved loan, as well as provide a copy of the loan contract and a statement disclosing all information pertinent to the amount borrowed.
The aforementioned information are only key points to consider when looking for a money lender. The Ministry of Law website provides a more comprehensive source of information in the “Info for Borrowers” and “Info for Money Lenders” web pages.