Many foreigners in Singapore find themselves strapped for cash from time to time, especially when they need money for medical emergencies or to pay their bills. These foreigners are in dire need of personal loans to settle their payables, and are, therefore, the most vulnerable to loan shark traps.
Some unlicensed money lenders or loan sharks in the state offer small loans with extremely high interest rates and hidden fees. Their tactics, in fact, have become brazen in recent years, with some targeting unsuspecting victims who have never done business with them directly. These loan sharks even threaten people with violence, charge them large interests, and cause millions of dollars in property damage.
As with all scams, the best defence is knowledge. So, let’s take a look at the common loan shark scams in Singapore and how you can avoid them.
1. The licensed moneylender impersonator
These tech-savvy Ah Longs advertise their ‘service’ through text messages, emails, SMS blasts, Whatsapp and other social media platforms. At first glance, they seem professional and legitimate, putting up a whole facade. Unknown to the common folk, they impersonate licensed moneylenders by using legitimate registration numbers from the Singaporean Monetary Authority. They use important credentials and information illegally, from the business name to the business address and registration number. Be wary when you receive offers about loan programs you never applied for, or be generally vigilant if you’re thinking of taking a loan.
2. The loan collector scam
This scam is pretty simple, but many still fall for it. The loan shark acquires the victim’s phone number and calls them, claiming that the victim has borrowed money and they are asking for repayments. In some cases, they bluff and make up stories, explaining that a third party has cheated the victim and that they are there to get the payment for the lending company.
If the victim refuses to pay, they threaten him/her with consequences, such as assault or vandalism to property. Some people who have borrowed money in the past fall prey to this tactic easily and immediately pay the scammer. If you have borrowed money in the past, call your lender or agent first and verify the call you received.
3. The fee transfer scam
The fee transfer scam is the most dangerous because the loan shark not only takes people’s money but also gains access to their personal information. The Ah Long will text or call the victim, claiming that they have been approved for a loan. The catch is that the victim needs to pay an admin fee before they can take the loan. The scammers will then trick the victim into giving them SingPass access, giving them the means to see personal and private information that they can later use to intimidate or harass the victim.
If they are successful, the loan sharks have scored a huge win. They not only receive the money transfer fee, but they also acquire personal information that they can use as leverage on their victims.
Other tell-tale signs of a loan shark include people who offer to do business without a signed contract. The law requires licenced moneylenders to use contracts for security and accountability. Loan sharks also offer huge sums of money to victims despite the victims’ relatively small incomes. Additionally, if they operate without an office and they’re not listed on the Ministry of Law’s website, they’re most likely illegal moneylenders who charge their victims with exploitative interest rates and fees.
Apply for a Foreigner Loan with Trusted Moneylender Capital Funds Investments
As a foreigner in Singapore, it can be difficult to find a financial institution you can trust to offer you a loan. Capital Funds Investment is Ministry of Law-approved and licensed. We provide foreigners in Singapore with a fair loan, and we never abuse the confidential information that we receive during the application process.
For more information regarding our CFI Foreigner Loan, call us on (65) 6281 7736 or send an email to firstname.lastname@example.org.