If you are planning to get a loan from a licensed money lender in Singapore, it is crucial to know your rights as a borrower.
Knowing if you are dealing with a legitimate money lender that provides reliable services is also important. That is why it is a must to conduct research on the background of a legal money lender because there are many unlicensed money lenders or loan sharks lurking around.
The Singapore government established new moneylending rules after cases of mistreatment of borrowers became prevalent.
But even with these rules in place, you may still find yourself in trouble with a licensed money lender if you fail to repay your debts. However, new laws prohibit money lenders from practicing certain behaviours on borrowers.
The new regulations in Singapore prohibit licensed money lender harassment. In this article, we will tell you what to do and where to get help if you experience licensed money lender harassment from a legal money lender.
First, let’s find out what licensed money lenders are allowed to do.
What Licensed Money Lenders Can Do
The Ministry of Law regulates and enforces the law regarding moneylenders’ activities in Singapore. Licensed money lenders have to respect and abide with the Moneylenders Act, which obliges them to respect a borrower’s confidentiality, privacy, and integrity.
By complying with this, licensed money lenders are prevented from conducting certain activities.
For example, when you are unable to pay a money lender in Singapore, the money lender can outsource this task to a debt collecting agency. But even if the Ministry of Law does not regulate such agencies, they still have to abide by established rules.
In fact, all debt collectors must obey the Code of Ethics set by the Credit Collection Association of Singapore (CCAS).
Here is what a licensed money lender can do when you fail to repay your loan:
Contact Your Family And Friends
Debt collectors are not allowed to harass or threaten your family and friends for loan repayment as this is against the rules and punishable by law.
But they can contact you on social media or visit your home or workplace and request to talk to you.
Negotiate For Loan Repayment On Your Behalf
When a licensed money lender sends a debt collector to recover debts, the latter can help you to negotiate loan repayment plans within your means.
For instance, you can suggest an installment plan for repayments, and the debt collector will take it back to the licensed money lender that hired its services.
What Licensed Money Lenders Cannot Do
Now you know that a legal money lender cannot go around informing others about the debt you owe. However, you should also know it cannot go this far unless you ignore its calls repeatedly.
The actions a licensed money lender cannot undertake include:
Harass, Threaten, Or Intimidate
You should note that no one is above the law In Singapore. The Protection from Harassment Act protects borrowers from licensed money lender harassment.
Hence, actions that provoke personal injury or damage property are punishable by law. Licensed money lenders are also not allowed to use vulgarities, abuse or insult you or your loved ones.
If they use threats to harm you or damage your property, they will be liable for criminal intimidation according to the Penal Code. Even if they don’t verbalise these threats but only use gestures, you can still report them.
Vandalise Your Property
According to the Vandalism Act, it is a crime to paint or write profanities on a person’s property.
The Act states a money lender cannot put “O$P$” on anyone’s door and expect not to be charged. Debt collectors cannot even paste notices on your door or hang banners that embarrass you. If they do these, they will face a $1,000 fine.
Stalking means to consistently and intentionally follow you and your loved ones. It also means repeatedly trying to be in the same place and visiting areas you are not at but are known to visit regularly.
This is the same as monitoring your movements. All these activities are prohibited by the law, especially if they are done to pressure you.
Damaging Or Confiscating Property
A debt collector or licensed money lender cannot show up anywhere and seize your property. No one is allowed to take your belongings without first coming up with a Writ of Seizure, which is only obtained after a trial in the Singapore courts.
So do not allow them to threaten you with the possibility of taking your property. Also, damaging property is a penal action regulated by the Penal Code.
Therefore, anyone who damages your property can get a jail term of 12 months and a fine.
The law does not allow anyone to cause harm to another person or damage his or her physical integrity. Such crimes can lead to severe punishment as follows:
- Two years in prison, a $5,000 fine, or both for injuring or knocking someone unconscious
- In case of dislocation, disfigurement or fracture, the offender can be jailed for 10 years, a fine, and caning
Participating In Unlawful Assembly
Unlawful assembly, in this case, is when a group of at least five people come to your doorstep like a mob to intimidate you.
So a licensed money lender can’t show up with its friends on your doorstep anytime to ask for money. If this happens, they can all be charged with unlawful assembly, which can land them in jail if they are found guilty.
Even if they are fewer than five in number, they will still face charges of intimidation and harassment.
How To Settle Your Debt If You Are Unable To Make Payments
If you are unable to make repayments for your debts and wondering how to settle a licensed money lender, the first thing to do is to contact the lender.
Next, discuss a debt repayment plan with them that works for you both. You can also do the following to settle your debt:
- Apply for a debt consolidation programme
- Renegotiate a payment schedule
- Seek debt counselling
- File for bankruptcy – this should be your last resort
What Some Debt Collectors May Resort To
Licensed money lenders can hire specialised debt collectors to aid in collecting money owed to them.
This collection aims to attain an agreement between the borrower and licensed money lender to create a suitable environment for settling the debt. Singapore does not have any legally binding laws for debt collection – instead, debt collectors follow the rules set by the CCAS.
It is important to note that debt collectors may resort to some actions that may turn out to be similar to that of an illegal money lender in Singapore, even though they may face criminal charges.
They can come to your house with no notice because they don’t have a formal process that they can follow. For further actions to recover the loan, debt collectors may take legal action against you. However, there are standards and limitations that such debt collectors should follow.
Also, they are members of the Credit Collection Association of Singapore, which sets rules that its members should follow. So if you feel a debt collector has mistreated you, you can report him or her.
If a licensed debt collector in Singapore visits your home, the first thing to do is ask for identification documents and note down his or her name.
If you feel uncomfortable seeing them, you may ask them to leave and deal with them over the phone. If you see them, you can explain that you can pay the debt by offering any necessary proof, such as a monthly budget if you have prepared one.
Where To Get Help For Licensed Money Lender Harassment
Most licensed money lenders follow the rules per the Moneylenders Act. However, some may still conduct malpractices.
So if you experience licensed money lender harassment, get help by doing the following:
Make A Police Report
If the debt collector is harassing, intimidating you, or threatening to seize or damage your property, alert the police immediately.
You can easily file a complaint if its actions are against the Protection from Harassment Act. After this, you will receive a Protection Order against them.
Complain To The CCAS
CCAS can deal with a licensed money lender or debt collector. However, they both must be members of the association. CCAS will then take the necessary action against the offender.
Note that this may not result in strict punishment as there is no specific law on it. But they may act as mediators by negotiating your loan repayment terms.
Also, only borrow from a licensed money lender – it will not help if the money was from an illegal lender.
Lodge A Complaint With The Registry Of Moneylenders
You can make a report to the Registry of Moneylenders when you receive threats from a licensed money lender.
You can also ask the Registry for help if the money lender charges illegal high interest rates.
The money lender may lose its license if it is found guilty of going against the law. Debt collectors may lose their debt collector license if found guilty of illegal activities when seeking debt repayment.
Know What Licensed Money Lender Harassment Involves
These rules govern what licensed money lenders cannot do in debt collection with respect to the borrower.
If you make payment on time and follow the contract’s terms, you are not likely to face any issues.
Choosing the right lender who is willing to listen and offer solutions based on your needs is vital. You don’t have to receive threats or intimidations even when you can’t repay your loan.
You can start by working with a reputable money lender like CreditMaster.
We treat all our customers with respect and adhere strictly to the Moneylenders Act. We will not tolerate any form of licensed money lender harassment.
At CreditMaster, we believe the loan application process should not be a stressful and tiring ordeal, but a great experience.
If you need a loan, get help from our friendly loan officers or apply for a loan now.