To regulate money lenders, Singapore’s Ministry of Law passed the Moneylenders Amendment Act in 2018.
The legislation aimed to improve consumer protections and tighten rules for licensed money lenders.
The Act resulted in new provisions establishing a framework for self-exclusion.
The purpose of the rule was to encourage borrowers to exercise self-control in their borrowing and engage in debt relief programme.
So under the framework, licensed money lenders cannot extend credit to anyone who has requested for self-exclusion.
In this article, let’s examine how the Moneylenders Credit Bureau (MLCB) implements the Act, as well as how to ban someone from a money lender.
What The MLCB Self-Exclusion Listing Is About And Who Can Apply
You are eligible to request a permanent ban on taking out any unsecured personal loans.
The Self-Exclusion Listing applies to all debt consolidation loans obtained from licensed money lenders.
But who can register for a self-exclusion list?
Anyone, including non-Singaporean citizens who happen to be in the country, can submit a self-exclusion order.
How To Register For A Self-Exclusion Listing
Those with Singpass can use the Moneylenders Credit Bureau website to apply for self-exclusion.
If you do not have Singpass but have a friend who does, he or she can register you with the Moneylenders Credit Bureau.
Be sure your documents are ready to be uploaded before permitting someone to submit them online for you. Here is how you do it:
- To register or withdraw from the Self-Exclusion Listing, you must submit a signed authorisation form
- Give evidence that you are the person who is looking for exclusion
The exclusion will not take effect for third-party registrations until the MLCB has reviewed and confirmed the validity of the submitted materials.
You and the authorised individual should receive an email updating you on the registration’s progress.
Effective Period Of Self-Exclusion
Anyone whose name is on the Self-Exclusion Listing, but whose exclusion period has ended can have his or her name removed.
Citizens and permanent residents of Singapore can choose an exclusion period of either one or two years when they register.
Exclusion periods for non-citizens must be a minimum of two years.
Costs Of The Self-Exclusion Listing
To add or remove your information from the Self-Exclusion Listing, Singpass holders must pay $3.
It costs $5 for a representative to register or withdraw on behalf of a foreign national who does not have Singpass.
The costs for both choices are inclusive of GST.
How To Verify If You Have Been Excluded
If someone places you on the credit bureau’s Self-Exclusion Listing, the time he or she did so and the ability to remove yourself from the list is available in your MLCB report.
You can access the report by purchasing it from the bureau.
Can Someone Exclude You Without Your Permission?
No. Opting out must be done on purpose.
Self-exclusion is only appropriate when requested voluntarily by the individual.
You can have someone else help you apply, but they will require your permission in an authorisation form.
It should clarify that you accept being self-excluded and know what it entails.
If the MLCB finds out the application for self-exclusion was made without your consent, it will be void.
How You Are Protected When You Take A Loan
Apart from the ability of individuals to apply for self-exclusion, other safeguards are also in place for borrowers.
In Singapore, the Registry of Moneylenders is in charge of enforcing the law and issuing licenses to businesses interested in opening moneylending operations in the country.
The Registry is a vital “watchdog” institution that protects consumers and lenders from fraudulent moneylending activities.
Its primary focus is ensuring that all legitimate lenders respect their customers’ rights in borrowing money.
Businesses that break the rules established by the Act face fines and license revocation.
Money Lenders In Singapore Must Comply With Strict Advertising Rules
Advertisements for moneylending services are only permitted under the Moneylenders Act (Chapter 188, Part III) in the following mediums:
- Print-based business or consumer directories
- The licensed money lender’s website
- Banners and other physical advertisements displayed outside or inside the money lender’s authorised office location
Licensed money lenders are not allowed to use other ad channels other than these.
That’s why licensed Singapore money lenders can’t promote their services through commercials, radio spots, billboards, emails, or SMS.
These restrictions also apply to online loans. Any time a money lender advertises a loan online, it needs to ensure it presents the details simply and factually.
Licensed money lenders are also prohibited from engaging in unfair business activities such as making false customer claims.
There Is A Limit To How Much You Can Borrow
Singaporeans can get help to manage their debts, as stated in the Moneylenders Act. The Act also regulates the most a borrower can get from a licensed money lender.
In Singapore, all money lenders calculate loan amounts according to a borrower’s yearly income. Lenders also have the option to place limits on interest and fees.
However, overcharging customers with excessive fees and interest rates is illegal for licensed money lenders.
It’s a safeguard for borrowers who could otherwise be subject to unfair or exploitative lending practices.
The maximum fees that licensed money lenders can charge their customers is:
- A maximum of $60 for a late payment fee
- Fees of up to 4% every month on the unpaid balance of your loan
- Late interest fee of up to 4% per month applied to the outstanding balance if the payment is late
- 10% service fee from the loan amount
If a money lender wins a lawsuit to recover its loan, it entitles them to be reimbursed for its legal costs.
Charging above-market interest rates, fees, and other charges are illegal in Singapore.
If you feel that a licensed money lender has overcharged you or acted unfairly towards you, you can lodge a complaint.
Access To Loans From Credible Lending Institutions
An example of another safeguard is: Only licensed money lenders that follow strict government criteria can issue credit to borrowers in Singapore, thanks to the Moneylenders Act.
This means licensed money lenders are a safe and legitimate alternative if a bank turns you down for a loan.
The Act protects borrowers from fraudulent lenders such as loan sharks, which can be threatening and exploitative.
The Ministry of Law maintains a registry of licensed money lenders.
If borrowers have a concern about whether a lender has a license, they can quickly and easily find out. Start by searching the blacklisted money lenders in Singapore, or find the list of licensed money lenders online.
Documents Required To Ban Someone From Taking A Loan
Wondering how to ban someone from a money lender?
As part of its social responsibility efforts, the Moneylender’s Association of Singapore (MLAS) lets members of the public file loan denial applications to money lenders on behalf of friends and relatives.
Public members can submit these requests on the MLAS website and provide identity documentation by mail or email.
As a fee for their service, the MLAS asks for $50 from each applicant. The form of payment, in this case, will be a cheque.
The documentation that you need includes:
- The front and back of the applicant’s NRIC
- Proof of relationship with the subject. Parents and children often show birth certificates, while spouses and partners may present marriage licenses
- Make your cheque out to MLAS. Be sure to sign and cross it
- Submit a cover letter with your full name and contact information, explaining why you want the person added to the “Do Not Lend Directory”. You can include any supporting documentation
Borrowing From A Money Lender Does Not Have To Be Risky
You may not need to register for a self-exclusion listing or know how to ban someone from a money lender.
But you can feel safe borrowing money in Singapore because of the Moneylenders Act.
So if you need cash, your best bet is to borrow from a licensed money lender. The government has set strict legal safeguards in place for customers like you.
Lending Bee is a top choice among Singapore’s licensed money lenders for those who find themselves in a tight spot.
We offer financial support with simple loan terms.
Reach out to us, and we will tailor the loan to fit your capacity to repay with no tedious paperwork or complicated procedures.
So apply for a loan with us now.
About Ashley Sim
Calling herself a “professional multi-tasker”, Ashley worked as a relationship manager in a bank for five years. She left her job just before the pandemic happened and became a freelance writer for about a year. Now, she’s making the most of her love for writing and knowledge of the banking and financial industry in her role as a content marketing lead. She hopes to help people make better financial decisions through her content and campaigns.
