Where Can You Get Help for Licensed Money Lender Harassment?
October 14, 2022
You may have heard of people who default on their loans being harassed by money lenders.
This scenario is expected when you get a loan from an illegal money lender in Singapore.
On the other hand, licensed money lenders rarely harass loan defaulters and follow a clear procedure upon loan default as per rules and regulations set out in the Moneylenders Act.
Yet some licensed lenders may break the rules and harass borrowers for defaulting on loan payments.
If this happens to you, where can you get help for licensed money lender harassment?
What Licensed Money Lenders Can Do
The Moneylenders Act regulates the conduct and proceedings of a licensed money lender in Singapore.
The Act has provisions that guide a money lender in respecting borrowers’ privacy, integrity, and confidentiality.
Thus, the Act bars money lenders from acting violently or unlawfully when dealing with borrowers.
Many money lenders opt for the services of a licensed debt collector in Singapore when borrowers default on their loan payments.
These agencies act on the behalf of the money lender to recover a defaulted loan. They must, however, abide by the Credit Collection Association of Singapore’s Code of Ethics.
You should familiarise yourself with the existing laws that protect your rights as a borrower in Singapore. Hence, note that if you default on repaying your loan, your money lender can:
- Talk to your family or immediate relatives about your defaulted loan. The law allows a licensed money lender to approach your family to inform them that you’re unable to pay the lender. Singapore laws also allow the lender to call you regarding the loan.
- Renegotiate the repayment terms. Another alternative most lenders opt for is to reschedule your payments to suit your constraints. The debt collectors can help mediate between you and your money lender on the best possible terms to arrive at a workable solution. For instance, you can, on your terms, propose a repayment plan, or if there is none, it can offer you one.
But why do most money lenders prefer debt collecting agencies to follow up on their loans?
The main reason for this practice is that these agencies have better mediating skills than money lenders. Therefore, they can quickly reach a perfect solution with borrowers.
What Licensed Money Lenders Cannot Do
That said, some licensed money lenders may act otherwise from what the Code of Ethics states.
Note that the following practices by licensed money lenders are illegal and unacceptable in Singapore.
Harassment, Threats, and Intimidation
The Protection From Harassment Act states that nobody is above the law. The law bars anybody, including licensed money lenders, against:
- Using threats
- Using abusive words on you, family, or friends
- Insulting you, your family, or friends
- Acting indecently towards you
Therefore, if your money lender threatens to hurt you or damage your property, you can sue them for intimidation, as per the penal code.
Licensed money lenders are not allowed whatsoever to:
- Intentionally follow you or your family persistently
- Try to be with you everywhere you go
- Go to places you often visit, even in your absence
- Monitor your whereabouts
Note that stalking for intimidation is illegal and chargeable as a criminal offense. Therefore, you can file a case against your licensed money lender if they stalk you, primarily for intimidation.
The Singapore law protects borrowers against physical harm by licensed money lenders. In case of illegal harassment, you can report them for severe punishment by the Singapore justice system. If your licensed money lender:
- Causes dislocation of your body part, fracture, or any other grievous offense, it may have to serve a 10-year jail sentence and a fine
- Forces you to an unconscious state, it can be charged a $5,000 fine, serve a two-year jail sentence, or both
Vandalising Your Property
The Vandalism Act protects borrowers against licensed money lenders who vandalise their properties.
No licensed money lender or debt collecting agency should write profanities, paint your property, or put embarrassing posters on your property.
Any act by the money lender that constitutes property vandalism is a criminal offense that will result in a fine of not less than $1,000.
Damaging Or Taking Ownership Of Your Property
You shouldn’t feel worried that money lenders or debt collecting agencies will take possession of your property or damage it if you fail to pay their loans. Such actions need a Writ of Seizure and a sale grant can only be granted after court proceedings.
If licensed money lenders damage or wreck your property, they would have acted against the penal code. Upon charging, they can serve a jail term of twelve months and a fine.
Engaging in Unlawful Assembly
You should be aware that no money lender or debt collecting agency can come to your home in a group of five or more to ask for your loan repayment.
If they do so in a mob-style manner, this amounts to unlawful assembly. You can report them to the police.
When found guilty, they can serve a severe jail sentence.
What Some Debt Collectors May Resort To
When you default on paying off your debts, some licensed money lenders may resort to:
Penalties And Legal Action
If lenders have tried reaching out to you through reminders and notices to no avail, they may resort to a penalty or legal action.
Late payment by a few days can be rectified. However, if you fail to pay for a month or more, the consequences may be more dire.
If the loan you owe is a secured one, the licensed money lender may resort to taking possession of your collateral asset to settle the loan. But you need to be given due notice.
Take note that your rights should not be compromised whatsoever.
Breach of contract on the grounds of late repayment cannot amount to a criminal act alone. Therefore, if you fail to pay on time, your licensed money lender may file a case at the civil court to recover its money.
The Negotiation Instrument Act of 1881 (Section 138) states that if a borrower fails to repay a debt for more than 180 days, a licensed money lender is, by law, eligible to file a case against the borrower.
If the borrower has genuine unavoidable reasons for not repaying the loan, the court will direct the lender to devise a workable repayment schedule for the borrower.
However, if the court finds the borrower guilty of fraudulence, he or she may be charged with a criminal act.
Where To Get Help If A Money Lender Harasses You
When you cannot repay your loan and your licensed money lender harasses you or acts unlawfully, you can get help by doing the following:
Contact The Police
Once you experience licensed money lender harassment, call your local authorities.
Explain to them what happened and the whole story behind the menace. The local authority should be able to tell if the actions of your licensed money lender or debt collecting agency amounts to an illegal act.
Suppose the police tell you that the money lender has breached the Protection from Harassment Act.
In that case, they may direct you to apply for a Protection Order or Expedited Protection Order against the money lender.
This option keeps you safe and buys you time to repay your debts.
Contact The Credit Collection Association Of Singapore (CCAS)
The Credit Collection Association of Singapore is a good mediator that can help you reach an agreement with your money lender.
It can help you find ways to settle licensed money lender debt.
However, before contacting the CCAS, ensure that the legal money lender or debt collecting agency is a CCAS member – otherwise, the CCAS will not intervene.
That’s why we recommend Singapore borrowers to only take loans from licensed money lenders.
Negotiate A Repayment Plan
In case of late payments or defaulting, it is sometimes a good idea to keep your head low. Acknowledge your loan repayment obligation and commit to renegotiating the repayment terms with your money lender.
This process is a win-win alternative as it maintains a good credit score.
While filing for bankruptcy relieves you of the financial obligation to repay your debts, it severely impacts your credit score. It should be considered as a last resort.
On the other hand, renovating the repayment schedule ensures your money lender gets their money back.
The available options when renegotiating your repayment plans are:
- Establish a proposal and discuss it with your lender.
- Ask the debt collector with a license in Singapore or CCAS to assist you.
- Seek assistance from Credit Counselling Singapore.
- Resort to a Debt Repayment Scheme if your debt is below $150,000.
Never Tolerate Licensed Money Lender Harassment
Unfortunately, some borrowers in Singapore had less-than-ideal experiences with their money lenders when they failed to repay their debts.
But GS Credit does not condone any act of violence, threats, or unfair treatment. As a licensed money lender, we value our customers and treat them with the utmost respect, no matter the situation.
If by bad luck, you fail to repay your debts on time, we shall look at your situation and rework your repayment terms to ensure you have an easier time paying off your debts.
Why not try us today?