If you have been receiving strange loan offers via phone messages or emails from unknown sources, chances are you’ve become a target of unlicensed money lenders. Don’t fall prey to any of these fancy loan shark advertisements that promise a good deal because they are just sham tactics that are trying to scam you into handing over more of your hard-earn money.
In recent years, there have been countless reports of rampant marketing tactics that are trying to entice individuals to sign up for illegal loans from unlicensed lenders, also known as ‘Ah Long’ or loan sharks. Such illegal lenders are dangerous because they trick borrowers into taking up loans at exorbitant interest rates and utilise unregulated harassment methods to chase debts. Their methods often cause harm to borrowers, their families and even disrupt the neighbourhood.
The best way to avoid being scammed by these illegal money lenders is to first identify what a loan shark advertisement looks like and what to do when you receive one. Read on to find out more.
What Form of Advertising and Promotions Are Licensed Moneylenders Allowed To Do?
Licensed moneylenders in Singapore are regulated by the Ministry of Law and their activities are governed by the Registry of Moneylenders which stipulates strict guidelines on how and where moneylenders can promote their business, their debt collection methods, and even the maximum interest rates they can levy on a loan.
According to the Registry, licensed moneylenders in Singapore are only allowed to market their business via:
- Official business or consumer directories in print or online media
- A business website that belongs to the licensed moneylender
- Promotion materials or advertisements within the lender’s premise or on the exterior of the business such as an external wall, doors, shutters, gates, and windows.
If you see any advertisements or promotional messages from moneylenders in channels that are not part of the three approved ones mentioned above, they are bound to be a loan shark advertisement that you should steer clear of.
What a Loan Shark Advertisement May Look Like
In a country like Singapore where nearly over 90% of the population is literate, it is hard to believe that many still fall into the trap of illegal moneylenders. But the truth is, most people who are in dire situations tend to think less rationally and are more vulnerable to attractive offers like an illegal loan. This is why having a clear understanding of where the possible traps are laid and taking mindful steps to avoid them are of utmost importance.
Based on many reported cases, loan scam marketing tends to take place in the five methods below:
- Unsolicited mobile phone messages via SMS or Whatsapp offering attractive loan packages and financial assistance
- Online advertisements and unsolicited messages via social media platforms like Facebook Messengers
- Unsolicited emails to initiate contact and offer financial assistance
- Flyers and pamphlets distributed in public places or via mailboxes
- Approach ignorant foreign domestic workers to sign up for illegal loans
How To Avoid Being Scammed by Loan Sharks
Singapore Police Force has always emphasized the threat of unlicensed moneylenders on the community and has been actively clamping down these syndicates to reduce the rising number of scam cases. However, more needs to be done through the community to fight against these negative occurrences.
Here’s what you can do to avoid being scammed by loan shark advertisements and help others not to fall prey to loan shark scams:
- Don’t just delete unsolicited loan shark messages from your mobile phone but choose to block and report the scams through the app
- Ignore loan shark advertisements and do not reply to such messages or give out your personal information such as NRIC, SingPass, or bank account details to anyone.
- Report all loansharking activities and suspicious individuals in your neighbourhood to the police.
- Call the National Crime Prevention Council’s hotline at 1800-924-5664 if you spot illegal loan shark marketing activities.
- Provide information about suspicious loan shark activities via I-Witness, an online submission platform managed by the Singapore Police Force. You can choose to remain anonymous when supplying information on this platform.
- Educate your foreign domestic worker about loan shark scams and the consequences of taking up a loan with illegal loan sharks or assisting them in illegal activities.