When life gets tough and emergencies keep cropping up, people will naturally turn to money lenders.

However, as many would attest, there are so many lenders out there that one may fall prey to a rogue one.

This article will provide you with information on how to lodge a complaint against a licensed money lender, as well as unlicensed money lenders.

But first, let’s take a look at what unlicensed moneylending entails.

What Is Unlicensed Moneylending?

Unlicensed moneylending involves unlicensed individuals and companies lending money to borrowers.

These unlicensed lenders have no authority to lend money. Loan sharks, or “Ah Longs”, quickly lend you money without explaining the loan terms.

Borrowing from unlicensed money lenders will push you further into debt. These loan sharks are known to charge high interest rates and fees, compounding your financial issues.

They will give you a loan with no documentation that shows the loan terms.

If you are not careful, your debt may end up being huge within a short time. And when it’s time to collect the money, they will use any means possible to ensure they collect their money.

They will harass, intimidate, and threaten you.

How To Recognise An Unlicensed Lender

You can recognise an unlicensed lender by any of the following signs:

It Does Not Appear In The Registry Of Moneylenders

Unlicensed lenders don’t follow the set regulations and they are not registered. Checking the Ministry of Law’s list of licensed money lenders is the easiest way to confirm if a lender is legal.

No Loan Contract Is Provided When You Apply For A Loan

Licensed lenders will provide you with signed documents showing the loan terms. On the contrary, unlicensed lenders will not issue any contract showing the loan details.

No Loan Limit

The amount of unsecured loans a licensed lender can give is capped and depends on the income of the borrower. There is no limit when it comes to secured loans.

On the other hand, unlicensed lenders don’t have a limit on how much they can offer the borrower.

Upfront Fees

Some unlicensed lenders charge upfront fees to process the loan. If a lender requests processing fees even before the loan is disbursed, then it is most likely a loan shark.

Licensed lenders will not ask for any money to process your loan. They are allowed to charge not more than 10% in administration fees.

Resort To Threats When Collecting Their Money

Most unlicensed lenders resort to violence, harassment, and intimidation when collecting their money. If you experience any form of harassment, you are most likely dealing with a loan shark.

Unfair Practices Of Unlicensed Money Lenders

When you are desperate to get money and sort out an emergency, you are likely to fall for the ploys of loan sharks or “Ah Longs”.

Such unlicensed lenders will trap you into thinking they will quickly sort out your financial crisis, but they will only create more problems for you.

Here are some of the specific tactics used by illegal money lenders.

Inadequate Or False Disclosure Of The Terms Of The Loan Contract

Unlicensed money lenders or loan sharks will give you the money you need quickly.

They will not bother to explain the interest rate, loan tenure, and the fees you will incur. You will realise this when repaying the money borrowed.

They will call you even before you have organised your finances and ask you to repay the money you owe.

A closer look will reveal a high interest rate and exorbitant loan administration costs. Although you may have dealt with your emergency, you will now have a new problem to handle.

The unscrupulous lenders will call you constantly and remind you to pay for the loan. You will need to pay back the expensive loan you borrowed.

Always make sure you read the terms and conditions of a loan before you receive the money from a lender.

Check the loan admin fees and other costs. Make sure you receive the right amount.

Most importantly, always work with a licensed lender. The law will protect you in such a case.

Harass And Intimidate The Borrower If They Default Or Pay Late

Loan sharks and unlicensed lenders will harass you by calling endlessly and sending many threatening text messages.

They might even send such messages to your family and friends informing them of your debt.

If you try to negotiate repayment terms, they will issue impossible terms for such agreements. Instead, they want to take away your peace of mind.

Before you apply for a loan, you must make sure you are dealing with a licensed lender.

These lenders are governed and regulated by the Registry of Moneylenders. They will not harass or intimidate you in the event of default.

Licensed lenders have to follow various processes when collecting their debts. To recover payment, they will send debt collectors who have to adhere to the debt rules and regulations.

Inflated Interest Rates And Fees

Unlicensed lenders don’t follow the set rules and regulations.

They will charge an interest rate above the 4% set by the Ministry of Law. In addition, they may charge interest on the principal instead of the outstanding amount.

An unlicensed lender will also charge high admin fees. If you default, it will charge you high late fees.

At the end of the loan tenure, you may have to pay more fees than the principal amount, which should not be the case.

Borrowing from a licensed lender protects you from high fees. A licensed lender can charge you 4% interest per month.

In the event you default, it charges interest on the outstanding balance, not the principal.

They Don’t Respect Your Privacy

Loan sharks, or the “Ah Longs”, don’t care about your privacy. They will submit your information and loan details to your friends and family.

They may even put up posters telling the whole world about the debt you owe them.

Use False Advertisements

Unlicensed lenders will send you text messages and emails encouraging you to borrow from them. They make the deal sound sweet while, in essence, it’s not.

Most unlicensed lenders will not indicate all the loan details in the advertisement. Instead, they will show you how you can get large sums of money quickly at a very low interest rate.

You will soon realise the loans are much more expensive than they seem.

When To Lodge A Complaint Against A Licensed Money Lender

A licensed money lender is expected to follow the rules and regulations set out in the Moneylenders Act.

However, not all licensed money lenders follow the rules.

You can make a complaint against a licensed money lender if it does any of the following:

Charging A Higher Interest Than The Stipulated

Licensed money lenders are allowed to charge up to 4% interest per month.

Any licensed lender charging more than 4% is flouting the law. You make a complaint against a licensed money lender that flouts the rules to the Registry of Moneylenders.

 Issues Threats, Harassment, And Intimidation

The law prohibits a licensed lender from issuing threats during the debt collection process. If a lender harasses or issues threats, lodge a complaint against the licensed lender with the Registry of Moneylenders.

The Lender Fails To Issue A Loan Contract

Before a licensed lender gives a borrower the money, it must issue a loan contract. The borrower must understand the terms of the loan contract.

If a lender does not issue a loan contract with clear terms or explain the terms clearly to the borrower, it is breaking the law. Report such lenders to the Registry of Moneylenders.

How To Lodge A Complaint Against A Licensed Money Lender

Don’t tolerate threats or harassment from money lenders, even if they are licensed.

Licensed money lenders are subject to the jurisdiction of Registry of Moneylenders. This means you can lodge a complaint against a licensed money lender.

To make a complaint, you will need the business name, license number of the lender, and its contact information.

This will help facilitate the investigation. You can complain by calling the Registry of Moneylenders at 1800-2255-529. Alternatively, you may lodge the complaint online through the Ministry of Law website.

The representative from the Registry of Moneylenders may require you to attend an interview to aid in the investigation.

In case of threats or harassment, report the licensed lender to the police.

How Not To Fall For Loan Scams

Loan scammers will often try to impersonate licensed lenders. They will also give very attractive loan offers.

Stay up to date with their tactics. Here are a few ways to tell if the lender is a loan scammer:

  • It sends unsolicited texts and emails about their loans
  • Request the borrower to pay upfront fees
  • Withholds your identification documents
  • Does not give a loan contract or provide clear terms
  • Uses any platform to advertise their loans such as texts, emails, and flyers
  • It is not on the Ministry of Law’s list of licensed money lenders

To avoid falling for such scams follow the tips below:

  • Ignore the messages and advertisements from unlicensed lenders
  • Verify the credibility of a lender before you take a loan. You can verify by checking the Ministry of Law’s list of licensed money lenders
  • Keep your documents and information private. Avoid giving your documents to a lender that you suspect may be a loan shark
  • Don’t send any upfront or processing fees. The minute you send the money, the scammer will disappear without a trace or block your number
  • Avoid loans with high interest rates. Loan scammers will entice you with loans at low interest. Be very careful because most of them offer loans with interest above the standard rate.
  • Protect yourself and other borrowers by reporting loan sharks or scammers to the police


If you have been a victim of illegal money lending, it is important to You can make a complaint against a licensed money lender with the relevant authorities.

By doing so, you can help put a stop to these illegal activities and protect other people from becoming victims.

Do not suffer in silence – make your voice heard and act against these illegal money lenders.

If you are looking for a licensed money lender to work with, Lending Bee is a licensed money lender with some of the best rates.

To get the best deals, apply for a loan 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.