Things A Licensed Money Lender In Singapore Can’t Do When Collecting Debts
Jan 20, 2021
Reaching out to a licensed moneylender can make you feel nervous. That’s understandable; people in financial difficulties go through an array of feelings, from fear to self-blame.
Plus, there’s the terror from horror stories where debt collectors harass you or become violent.
Here’s the deal:
Licensed moneylenders would never do that. Only loan sharks and those illegal lenders will resort to threats and harassment.
You should be afraid of the ah long. These people can send expensive delivery to your home, pictures of burning houses, and even photos of your kids.
But licensed moneylenders are highly different. You can find one of the best licensed moneylenders in Singapore here.
Before you fall into any traps, it’s best to know what you’re going into. Learn what authorised financial institutions can’t do when collecting debts so that you can protect your rights. Be vigilant and identify the signs.
What Can A Licensed Moneylender Do?
The Ministry of Law in Singapore has arranged and regulated licensed moneylenders’ activity. They have rules to follow, if not they risk losing their moneylending license.
You can read more about that in the Moneylenders Act, as well as on the Registry of Moneylenders’ website. In fact, RoM has a handy FAQ page with everything you need, including the list of licensed moneylenders operating today in Singapore.
Pro tip: Check your licensed moneylender’s name on that list to ensure you’re not dealing with a loan shark. The list is updated every month.
So, since MinLaw regulates licensed moneylender’s activity, you know these agencies follow strict laws. These laws make sure:
– Your data stays confidential
– Your privacy is respected
– You’re not being assaulted, harassed or threatened in any way by the moneylender
– If you can’t repay the loan, the moneylender can only follow legal procedures to recuperate that money.
So why do even licensed moneylenders get such a lousy street rep?
Here’s what caused it all:
These lending agencies employ debt collector companies to retrieve the money from people who can’t reimburse their loans. MinLaw allows them to do that, so there’s nothing illegal here.
The problem was that some of these debt collectors employed massive scare tactics or even used violence when people couldn’t fork out the money.
Thankfully, a lot of that problem has been resolved.
In 2013, debt collectors formed a new association called the Credit Collection Association of Singapore (CCAS). MinLaw doesn’t regulate CCAS, but this association has a Code of Ethics that abolishes unreasonable tactics. Luckily, debt collectors in Singapore follow CCAS standards.
Also, you can read that Code of Ethics to learn which practices you should report in case you’re dealing with someone who breaks the law.
And there’s even better news:
Most debt collectors in Singapore are passionate about helping people, and that’s why they took this job. So if you can’t repay your loan, a good debt collector can help you renegotiate your terms:
– You can propose a new plan, and the debt collector will negotiate the new terms with your lender, or:
– You can discuss your situation with them, and the debt collector will propose alternatives to your current repayment scheme.
Unfortunately, some parts of the problem remain.
For example, debt collectors in Singapore are still allowed to:
– Contact your friends and family
– Call you
– Drop by your house or office
– Contact you on social media
Pro tip: Debt collectors that GS Credit works with don’t use exaggerated scare tactics. GS Credit respects all of our borrowers and we have never had a complaint about our debt collection methods. You can read our customers’ reviews here. We ensure that all procedures are done professionally!
What A Licensed Money Lender Cannot Do In Singapore
Remember: Even though debt collectors can tell friends and family about your debt and call you, licensed moneylenders aren’t allowed to do that. They remain professional and polite while collecting debts.
Also, debt collectors aren’t allowed to use threats, insinuations, harassment, or behave illegally.
No licensed lender is allowed to send you hate mail, spray things on your door or neighbours’ doors, or try to confiscate your ID. Those who do that are loan sharks and will be punished by the law.
Here’s what a licensed moneylender in Singapore can’t do:
1. Harassment, Threats, Or Intimidation
The Protection From Harassment Act clearly states that nobody is allowed to:
– Threaten you
– Say abusive words
– Insult you
– Act abusively or insultingly
– Publish info regarding your identity
– Cause you or anyone else harassment, alarm, or distress
Basically, this law eliminates much of a licensed moneylender’s or debt collector’s possible damaging behaviour. Nobody can call you names, threaten you in any way, or act in a manner that insults you.
Even better: This act makes sure the licensed moneylender can’t cyberbully or embarrass you online.
Pro tip: We said earlier that debt collectors could inform your friends and family about your debt. But doing that would be highly problematic; phrasing that info carelessly would verge on harassment, and you could easily report them.
The Protection From Harassment Act defines unlawful stalking as well. Unlawful stalking means:
– Following you or someone related to you (employer, friend, family member)
– Trying to or communicating with you or someone connected to you by any means necessary
– Staying nearby or entering any place where you live, work in, or frequent
– The previous point is valid even if the actions are regarding someone related to you
– Interfering with your property or that of a related person
– Giving or sending you things or leaving these things somewhere where you can find them
– Surveilling you or someone connected to you
So now you know that a licensed moneylender or debt collector can’t loiter around your house or workplace. They can’t wait for you in the parking lot or give you objects that you’d consider threatening. At the same time, they can’t watch your place or try to get in touch with you even after you’ve blocked their number.
A licensed moneylender or debt collector can call you during business hours, and they can send you legal documents, like invoices or contracts.
Pro tip: Even if a debt collector can call or contact you on social media, doing so too often/ too insistently would be considered stalking.
3. Injuring You
Causing hurt is a severe offence in the civilised world.
That’s why Singapore has established severe punishments depending on the level of injuries someone has inflicted on another person. Even minor injuries that leave no visible signs are punishable with 4-6 weeks of prison, whereas serious injury means several years in goal plus considerable fines.
Needless to say, a moneylender or debt collector can’t use force or violence on you when collecting debts.
They can’t kick, punch, slap, or immobilise you under any circumstance. So remember to call 999 immediately if someone is using violence.
4. Vandalising Your Property
The Vandalism Act says that neither licensed moneylenders nor debt collectors are allowed to:
– Make inscriptions/ slogans/ caricatures/ symbols or any other thing
– Affix/ display/ hang, etc. posters, placards, bills, slogans on your property.
So no, a licensed moneylender can’t legally splash O$P$ on your door, hang banners outside of your work, or write profanities on your car.
They can’t even write nice things on your property.
If they do, they’re facing an up to $1,000 fine.
5. Damaging Or Taking Your Property
A common scare tactic that some law-breaking debt collectors apply is saying they’ll take your car, home, or jewellery. These people can also threaten they’ll damage your assets.
And you should know both types of threats are illegal:
– Nobody can damage your things intentionally as a form of revenge or coercion unless they want to spend a year in gaol.
– Nobody can take your things – not even a licensed moneylender – without a Writ Of Seizure And Sale.
6. Engaging In Unlawful Assembly
Some debt collectors or licensed moneylenders believe they’re playing in Narcos when they form a group to come banging on your door.
But that sort of mob-style debt collecting is illegal.
Here’s what the law says:
Unlawful assembly is considered a group of at least five people, and if a licensed moneylender’s doing it, they’re facing prison time.
What Can You Do If A Licensed Moneylender Acts Illegally?
If a licensed lender or debt collector uses intimidation, harassment, violence, or damages your property, you should:
1. Contact The Police
Call the police immediately if you feel that your life is in danger or you need urgent assistance.
Their emergency phone number is 999, but you can also use:
– Emergency SMS: 71999 (if you can’t talk because someone is threatening you or has hurt you already)
– Police hotline to provide crime-related info: 1800 255 0000
– I-Witness e-Service: https://www.police.gov.sg/I-Witness
– Anti-scam helpline: 1800 722 6688 or https://www.scamalert.sg/
Remember: call the police even if you’re not sure whether your licensed moneylender has acted illegally; they’ll answer your questions and tell you what else you need to do.
2. Contact CCAS
CCAS can help you resolve things with your licensed moneylender, but only if they’re CCAS members. Also, CCAS can’t help you if you’ve borrowed money from a loan shark.
3. Contact The Registry Of Moneylenders
The Registry of Moneylenders in Singapore can help if a licensed lender is harassing you or if you notice any illegal behaviour (e.g., very high interest rates, not giving you receipts, etc.)
Make a complaint with RoM here.
Protect Yourself Against Illegal And Unacceptable Debt Collectors
If you’re here, you know that a licensed money lender in Singapore can’t use force, threats, harassment, or abuses of any kind.
Report this illegal behaviour immediately and start working with a financial institution that treats you with respect.