Dangers of Borrowing from Unlicensed Moneylenders
Are you facing harassment from borrowing from unlicensed moneylenders?
Read this article to find out more about unlicensed moneylending, immediate safety steps you can take and support services available in Singapore.
Introduction
Singapore, despite being a developed country, is not immune to the societal and economic issues arising from unlicensed moneylending. Unlicensed moneylenders, commonly referred to as “Ah Longs” or “loan sharks”, prey on borrowers in financial distress, exploiting their vulnerability through predatory practices that can result in severe mental anguish and, in some cases, even physical harm.
Under pressure, borrowers may make impulsive decisions, overlooking the long-term consequences for the sake of short-term relief. Such decisions often spiral, causing significant harm not only to themselves but also to their loved ones.
How do unlicensed moneylenders operate?
Victims are usually in financially vulnerable positions, having exhausted legitimate credit options such as banks and licensed moneylenders. Unlicensed moneylenders exploit this desperation, often charging exorbitant interest rates with the intent of trapping borrowers in perpetual debt.
Beyond financial exploitation, victims may be coerced into illegal activities such as splashing paint on homes, allowing their bank accounts to be used for money laundering or scam transactions, or assisting in other unlawful acts as a way to reduce part of their debt.
When seeking repayment, harassment and abuse are common. Lenders may turn up at the victim’s residence to intimidate family members and neighbours. They often call repeatedly from different mobile numbers, hurling vulgarities and threats to pressure payment. In some cases, they extend harassment to the victim’s workplace, targeting employers and colleagues, thereby jeopardising careers and professional relationships.
In some cases, lenders do not require face-to-face meetings or proper identity verification. This increases the risk of individuals being falsely named as guarantors or sureties without consent, causing significant distress.
A more recent tactic involves ordering large quantities of food via cash-on-delivery through various delivery platforms to the victim’s address, often late at night, as a form of harassment.
Despite these risks, some victims continue to borrow because they feel they have no viable alternatives. Fear, shame and social stigma often prevent them from seeking help, further isolating them from legitimate support channels.
Singapore has taken a firm stance against unlicensed moneylending, actively raising public awareness through enforcement efforts, campaigns and educational initiatives.
What to do if you are a victim of unlicensed moneylenders?
If you find yourself being harassed or threatened, take immediate steps to safeguard yourself and report the matter to the relevant authorities.
Step 1 – Take Immediate Safety Measures
Cease All Payments: Stop making any further payments to the loan shark. Unlicensed moneylenders have no legal right to recover debts, and continued payments may prolong the harassment.
Secure Personal Information: If you suspect your personal details have been compromised, change your phone number and online passwords immediately. Monitor your bank accounts for unusual activity. If threats escalate, consider installing CCTV at your residence and inform your neighbours to remain vigilant.
Avoid Confrontation: Do not engage with or attempt to negotiate with the harassers. Block their numbers and avoid responding to unknown or suspicious individuals.
Step 2 - Report to Authorities
If you are being harassed or threatened, report the matter immediately. Reports can be made anonymously.
Police: 999
X-Ah Long Hotline: 1800-924-5664
Provide as much evidence as possible, such as screenshots of messages, call logs, bank transfer records, photos of vandalism, or recordings of threats.
Detailed information strengthens investigations and enforcement action.
Step 3 – Know Your Legal Protections
Under the Moneylenders Act 2008, unlicensed moneylending is a criminal offence. Offenders may face imprisonment, fines, and caning upon conviction.
If harassment persists or escalates, you may seek legal protection under the Protection from Harassment Act (POHA) by applying for a Protection Order (PO).
A Protection Order may:
1. Prohibit the perpetrator from continuing harassing acts;
2. Require the removal or cessation of harassing communications;
3. Direct parties to attend counselling or mediation; and/or
4. Include any necessary orders to ensure your safety and protection.
Step 4 – Seek Financial and Emotional Support
Beyond reporting the situation, seek support through appropriate channels, including financial counselling services, social service agencies or community networks. You do not have to manage the situation alone.
Credit Counselling and Managing Legal Debts (Banks and Licensed Moneylenders)
Credit Counselling Singapore
Tel: 6225 5227
Email: [email protected]
If you are feeling overwhelmed, click here to learn more about CCS credit counselling services and the support available to help you regain control.
Financial Aid
MSF ComCare
ComCare Hotline: 1800-222-0000
Website: https://www.msf.gov.sg/what-we-do/comcare
Emotional Support
Reach out to trusted family members, friends, or community groups. Victims often experience significant psychological distress and should not suffer in silence.
Source:
1. Unlicensed Moneylending
https://www.police.gov.sg/Advisories/Unlicensed-Moneylending
2. Guide to Singapore's Protection from Harassment Act (POHA)
https://singaporelegaladvice.com/law-articles/singapore-protection-harassment-act/