Are you hesitant to reach out to a licensed money lender for a loan because of fear? Or have you heard horror stories about borrowers in Singapore finding pig heads hung at their doorstep and getting kidnapping threats from loan sharks?
However, licensed money lenders are different from loan sharks. They are regulated under the Moneylenders Act, which doesn’t allow them to resort to licensed money lender harassment.
Keep reading this article to learn what licensed money lenders can and cannot do, and where to get help if you experience licensed money lender harassment.
What A Licensed Money Lender Can Do
The Ministry of Law in Singapore regulates the moneylending business under the Moneylenders Act. Therefore, every licensed money lender must adhere to the laws or risk losing its license.
According to these regulations, a money lender should uphold the borrower’s data confidentiality and maintain privacy. It is also the money lender’s responsibility to respect the borrower’s integrity.
This means that no violent acts are allowed even when you are unable to pay your money lender in Singapore.
Besides, it is not the responsibility of legal money lenders to recover debts. A licensed money lender should outsource debt collectors for this task.
Although licensed money lenders are not allowed to harass borrowers, they are permitted to do the following with the help of a licensed debt collector in Singapore:
Tell Your Family And Friends About The Debts You Owe
When you apply for a loan, and it is granted, you need to repay it as agreed on the contract. However, sometimes life happens, and you are unable to settle the debt.
In such a situation, your licensed money lender is allowed to contact your family members or friends and inform them about the loan through its debt collector.
The money lender can also call you or contact you through social media platforms.
Drop By Your Office
A debt collector is allowed to come to your workplace and request to see you. It can state that the visit concerns a loan.
Negotiate On Loan Repayment
Your licensed money lender can send a debt collecting company to negotiate with you on how to settle a licensed money lender.
You can propose a repayment plan that suits your financial capability and wait for your lender to approve it. On the other hand, a debt collector can suggest other repayment solutions, such as a Debt Repayment Plan (DRP).
What Licensed Money Lenders Cannot Do
Licensed money lenders are expected to remain professional when collecting debts from borrowers.
As a result, there are things they shouldn’t do, such as harassing you. Any lender who does this is likely to be an illegal money lender.
Here are some things licensed money lenders cannot do in Singapore:
Threaten, Intimidate Or Harass You
According to Singapore’s Protection From Harassment Act, no one should threaten, insult, or abuse you. Also, publishing information about your identity or causing any harassment, distress or alarm is not allowed.
This law restricts legal money lenders from calling you names even if you cannot repay what you owe them. It also protects you from online embarrassment or cyberbullying by a money lender.
The law extends to your family and friends too. Even though debt collectors are allowed to inform them about the loan, they are not supposed to harass, threaten or intimidate them.
No one is allowed to cause you harm or affect your physical integrity in Singapore.
Such an offence comes with a severe punishment. For example, if a licensed money lender knocks or wounds you in a way that causes you to be unconscious, the offender can be jailed up to two years, fined $5,000, or both.
On the other hand, if a money lender causes you to suffer a fracture, dislocation, or disfigurement, it can be jailed for up to 10 years, fined, or caned.
This form of licensed money lender harassment occurs when a lender:
- Keeps following you or your loved one
- Tries to or communicates with you or your loved ones by any means
- Stays nearby or visits where you live or work frequently
- Watches you or your family members and friends
- Interferes with your property or that of your loved one
- Sends you things or leaves them where you can find them
Licensed money lenders should not loiter around your home or where you work to remind you of a debt you owe them. They are also not allowed to wait for you at the parking area or send you something threatening.
However, a legal money lender can call you during business hours or send you relevant documents such as invoices.
According to the Vandalism Act, a licensed money lender cannot paint on your property or write profanities in public spaces. Therefore, it is an offence for a lender to write “O$P$” outside your home.
Also, debt collectors cannot paste notices on your door or hang banners regarding your debt. These actions are embarrassing to a borrower and considered mischief. They can lead to a $1,000 fine.
Damaging Or Taking Your Property
It is against the law if a licensed money lender threatens to take your home, car, jewellery or other property.
Damaging of one’s assets is not allowed in Singapore. Anyone who does so breaks the Penal Code and can be jailed for up to 12 months and fined.
For a money lender to be allowed to take your property, it needs a Writ of Seizure and Sale from a Singapore court.
Taking Part In Unlawful Assembly
An unlawful assembly is a group of at least five people that appears at your doorstep to intimidate you.
It is illegal for a licensed debt collector in Singapore to show up at your home and start asking for the money mob-style. This is considered an unlawful assembly and can result in a jail sentence.
What Some Debt Collectors May Resort To
As mentioned, a licensed money lender is permitted to employ a debt collector with a license in Singapore to help them with debt collection.
Unfortunately, some debt collectors enforced scare tactics and handled borrowers violently in the past. This painted a dire picture of the moneylending industry.
However, in 2013, debt collectors formed an association called the Credit Collection Association of Singapore (CCAS). Even though the Ministry of Law has no control over the CCAS, the association developed a Code of Ethics to govern its operations.
Therefore, any licensed debt collector is bound to this Code of Ethics and is not allowed to commit any act amounting to licensed money lender harassment.
You can go through these regulations to learn which practices are not allowed. You can also report a debt collector that breaks the law.
Fortunately, most debt-collecting companies are willing to offer a helping hand to debtors. If you are unable to pay your money lender in Singapore, a good debt collector can help you negotiate new loan terms.
This means you can propose a repayment plan that you are comfortable with, depending on your financial state. Then, the debt collector will negotiate the new tenure with your money lender.
Unfortunately, some debt collectors may resort to doing things you may not like when recovering loans. For example, they are allowed to:
- Call you to remind about the loan
- Get in touch with your family and friends to inform them about the debt
- Contact you via social media platforms
- Visit your office or home for debt collection
Where To Get Help For Licensed Money Lender Harassment
Even though legal money lenders and debt collectors have rules that govern them, a few may still break the law in the course of their duty.
If you face any licensed money lender harassment, insult, violence or damage, you can do the following:
Get In Touch With The Police
If you feel your life is in danger because of a debt you owe a money lender, you should contact the police. Also, if you are suspicious of something and aren’t sure if it is illegal, alert the police.
You can contact the police through:
- Dial the emergency phone number 999
- If you cannot talk because someone is threatening you, you can send them a text through the emergency SMS line 7199
- Call the police hotline at 1800 255 0000 to provide crime-related information
- You can also report such cases through the anti-crime helpline at 1800 722 6688
Speak To The Credit Collection Association Of Singapore
CCAS can help to mediate between a borrower and a licensed money lender. Therefore, you ask it to help you negotiate a new loan tenure to ease the burden of repayments.
However, your licensed money lender or debt collector must be a member of CCAS for the association to help.
Therefore, you cannot get its assistance if you borrowed a loan from an illegal money lender in Singapore.
Contact The Registry Of Moneylenders
You can contact the Registry of Moneylenders if you face licensed money lender harassment acts such as high interest rates. The body will review your complaint, and if the licensed money lender is found guilty, it will be fined.
Get Help For Licensed Money Lender Harassment
Getting a loan often comes with mixed feelings – you are happy to settle your pressing need while, on the other hand, you fear being unable to pay the debt.
When you cannot repay a licensed money lender in Singapore, what is it allowed to do, and what can’t it do?
The Ministry of Law regulates licensed money lenders, which are supposed to uphold your data confidentiality, privacy and integrity.
Remember that licensed money lender harassment is prohibited in Singapore. If a licensed lender insults, intimidates or abuses you, you can report it to the police, Registry of Moneylenders, or the CCAS.
If you need money urgently, you can find the loan you need at Lending Bee. We are a licensed money lender that abides by the rules set out in the Moneylenders Act.
We treat all our clients with the respect and understanding that they deserve and absolutely will not tolerate any form of licensed money lender harassment.
As such, we can assure you of optimum services in our operations.
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.