FAKE WATCHES, FAKE DESIGNER ITEMS, NOW... FAKE MONEYLENDERS
1. No need to provide income documents or meet face-to-face.
2. They ask for your SingPass login password.
3. They send you SMSes offering a a loan which legal lenders can't give.
4. They provide moblie numbers on their advertising materials. Legal moneylenders would need to operate from a registered land line.
Source: Mr Wayne Ng of Moneylender's Association of Singapore
They trick clients into believing their business is legal
REPORT:JOYCE LIM
WE'VE seen fake designer watches and handbags.
Now there are fake "licensed" moneylenders, too.
These illegal moneylenders copy the company names of legal moneylenders and their registered licence numbers, and use them in their own advertising materials, such as flyers and website banners.
They also copy the writing style of SMSes that banks send to their customers, and use these SMSes as templates when they reach out to their potential clients.
"These illegal moneylenders copy wholesale from the legal moneylenders. They then add their own mobile phone numbers on the advertising materials," Mr Wayne Ng. 28, assistant secretary of the Moneylender's Association of Singapore, told The NewPaper.
"When these potential customers do a company search, they will be tricked into believing that the illegal moneylenders are running a legal business."
Mr Ng added that in recent months, he has received four complaints from legal moneylenders saying that their company names and licence numbers have been illegally used to solicit for business.
But the tell-tale signs aren't hard to spot. (See graphics above.)
Mr Ng explained: "A legal moneylender will not be able to give you a loan just by obtaining your SingPass login password.
"Legal moneylenders are also not allowed to SMS potential customers to solicit for business."
Jack (not his real name), 39, was one of those who borrowed from a fake moneylender.
He agreed to share his experience on condition of anonymity.
Quick Cash
In January, he received an SMS offering him hassle-free quick cash.
He called the local mobile number, but there was no reply.
Two hours later, however, he received an overseas call.
"The call was made from a Malaysian mobile number," said Jack.
"The caller introduced himself as a staff member of a registered moneylending company. He spoke in fluent English and sounded professional.
"When I told him I wanted a loan of $2,000; he said that he needed me to provide some documents to process my loan.
"I told him I was unable to provide those documents and asked if I could still get a loan without the supporting documents.
"He said 'yes' and asked for my SingPass login password (which was used to check his residential address)."
At that time, Jack, who is married with a 5-year-old daughter, had just quit his job and working as a freelance construction coordinator.
His income was unstable and he desperately needed the money to support his family.
So he provided the caller with his SingPass login password, he said.
A few hours later, a young man called and asked to meet him at the void deck of the HDB block where he lives with his eldery parents, wife and child.
"I met him and he called his boss to say that everything was okay. Two hours later, the money was in my bank account," said Jack.
There was no document to sign and no vertification of particulars, he said.
But the friendly service turned nasty when he was slow in his repayment.
Said Jack: "The person called and threatened to pour paint at my doorstep, chain-lock my gate and harm my family.
"I feared for the safety of my family, but I had no money to repay them. At that time, I received a few more SMSes from other moneylenders.So I called them for a loan.
"This time, no one met me at my void deck.I managed to get the instant loans just by providing my SingPass login password."
But Jack's debts soon piled up.
Five months later, he is now servicing a loan of more than $12,000 with four moneylenders. He claimed that his weekly repayment comes up to $2,400.
"I'm at my wits' end. I have no way of paying back the loans," confessed Jack, who said that he earns about $3,500 a month.
Last week, he went to his neighbourhood police post to lodge a report against the illegal moneylenders.
Police confirmed that a report was made and said they are looking into the matter.
Lamented Jack: "I've been having sleepless nights as I fear that these people will really set fire to my flat.
"And I don't have the courage to tell my family about the debt. I know I took the wrong path."
In $8,000 debt over $300 loan
REPORT: CHAI HUNG YIN
Even going to licensed moneylenders can cost you if you don't do your sums. Short-term gain can come with long-term pain as this man, who wanted to be known only as Mr Dzul, 54, found out.
After his retrenchment from a bank in 2005, he could find a job only as a security guard, earning $1,000 a month.
His wife, who works as a health attendant, brings home about $700 a month.
Mr Dzul ended up owing more than $2,000 in conservancy charges over a few years for his five-room flat in Jurong.
It was the beginning of a debt spiral which saw him borrowing from a total of 13 legal and illegal moneylenders.
The father of four had panicked when he was asked to go to court to settle his conservancy charges.
He told The New Paper: "I turned to a legal moneylender for partial payment of the charges."
He said he did not seek assistance before doing so.
He borrowed $300 from the moneylender last July and had to repay $60 weekly. He said: "At that time, I was so desperate, I agreed to all the terms in the contracts."
But then, he missed a couple of payments and said that he had to pay late charges of $20 a day.
He then went to a second moneylender and borrowed $500 to help him settle his debts with the first one.
Problem resurfaced
Said Mr Dzul: "I could then settle the loan from the first moneylender. But then, I had problem servicing the second loan, which had a weekly repayment of $100."
Again, he went to a third moneylender to cover his spiralling debts and the scenario repeated itself.
And when he could not cope anymore, he turned to illegal moneylenders.
From his initial $300 loan, Mr Dzul's debts snowballed to about $8,000 in less than a year. He now owes money to seven legal and six illegal moneylenders.
Then, the harassment started.
Mr Dzul said a debt collector from one of the legal moneylenders came to his flat three times.
He said: "They knocked on my door and shouted at me and my wife. They also called my wife repeatedly and threatened to come down to my house if I didn't pay up."
Mr Dzul called the police after the third time.He also sought help from voluntary welfare organisation, One Hope Centre, he said.
While showing this reporter an SMS from a legal moneylender, he said: "I have to put a stop to this. Two other legal moneylenders have warned me via SMS.
"The harassment from the illegal moneylenders has not started yet, but it will start soon."
Mr Dzul added that on top of the exorbitant late fees, there is also a transport fee of $10 per trip charged when the debt collector makes a trip to his flat to demand payment.
The Ministry of Law amended the Moneylenders Rules which took effect last Friday. (See report below.)
Mr Dzul confessed that he regrets the "biggest mistake in my life".
He said: "I don't gamble, drink or smoke.l should have negotiated with the authorities with regard to my conservancy charges."
Changes made to Moneylenders Rules
1. Licensed moneylenders have to calculate and disclose the effective interest rate (EIR) of their loan packages to borrowers.
Previously, nominal interest rate was used to calculate the interest rate.
2. Borrowers earning an annual income of less than $30,000 get interest rate caps of 13 per cent of EIR for secured loans and 20 per cent of EIR for unsecured loans.
Previously, only those earning less than $20,000 had this interest rate cap.
3. Licensed moneylenders are no longer allowed to charge upfront fees, such as acceptance fees.
But in cases where the borrower defaults on payments, conditional fees such as late charges are allowed.
4. Borrowers can no longer borrow more than what they are allowed to based on the rules.
Previously, exceptions such as loans for business, renovations and education were allowed, which enabled borrowers to borrow above the limit.
News, The New Paper, Tuesday, June 5 2012 Pg 6-7
That's why I say always avoid those 'moneylenders' if possible, so many ah longs posing as finance companies. If I need fast loans, I will go to a local bank like UOB, POSB, OCBC etc. Dun wan ppl to come to my hse and paint owe $ pay $ on my walls.
Need 30k urgently??? To buy a 30k diamond ring for parn is it? You kk?
Not to forget Post Office Finanical services like ezyCash Personal Loan : http://www.singpost.com/financial-services.html