Moneylending organisations in Singapore are able to help improve your cashflow by giving you a loan.
Yet is it is important to choose a licensed money lender and not a loan shark.
Loan sharks are known to harass their borrowers when they fail or miss the repayment deadlines. Sometimes, they may even visit the workplace of borrowers, stalk, or even physically assault them.
Yet licensed money lenders may also break the rules and regulations.
Remember that licensed money lender harassment from government-authenticated lenders signifies a rule violation.
If proven guilty, the perpetrator can face a fine, several years of jail time, or both.
In this article, we discuss your rights, the responsibilities of licensed money lenders, what they can do, and which actions violate the law.
What Can Licensed Money Lenders Do?
The Ministry of Law has come up with guidelines that keep moneylending practices in Singapore in check.
In addition, the Credit Collection Association of Singapore (CCAS) has laid down a Code of Ethics.
It concerns the professional activities of debt collectors, whom licensed money lenders appoint to recover debts.
Here are some crucial points that licensed money lenders must observe while interacting with prospective borrowers:
Money lenders must show professionalism at all times. They respect your privacy and only contact you when absolutely necessary.
Ideally, they are not supposed to come in direct contact with your relatives or friends to discuss your monetary situation.
Neither are they allowed to meet you at your workplace or interact with your superiors regarding your loan agreement.
According to the Ministry of Law, all licensed money lenders have access to Moneylenders Credit Bureau (MLCB), which holds a repository of borrowers’ credit history.
The Moneylenders Act clearly states that no licensed money lender is allowed to disclose a borrower’s information.
The Act firmly declares that a licensee must ensure the integrity of a borrower and may arrange for security measures if necessary.
A money lender must protect the borrower’s information from unauthorised access, fabrication, improper use, or similar risks.
If an agency cannot comply, it shall be liable to pay a fine of $20,000 or may face imprisonment.
As such, most licensed money lenders prioritise customer privacy and function accordingly.
They are wary of the law and don’t resort to unfair means, leaving no room for you to become a victim of licensed money lender harassment.
Licensed moneylending agencies appoint debt collectors to recover debts from their borrowers. These field agents mediate between the moneylending agencies and the borrower.
They also offer valuable credit suggestions to borrowers concerning their loan history.
Such debt collecting agents abide by the Code of Ethics.
This means they must process the sensitive and personal data of a borrower in compliance with the Data Protection Principles.
They need to ensure that technical and organisational measures don’t cause any breach of a borrower’s privacy.
What Debt Collectors Can Do
Below, we cover the legitimate actions that debt collectors, in collaboration with licensed money lenders, can take:
Debt collectors can trace a borrower’s whereabouts using a reliable database.
It may include interacting with other people concerning the debtor. However, they must ensure that the tracing process follows the relevant regulations and guidelines.
The debt collectors can communicate with the borrower to provide information regarding repayment methods.
They may also use letters, emails, telephone calls, or text messages to convey essential information such as who’s in charge of the debt collection.
Doorstep Debt Collection
CCAS considers doorstep debt recovery to be an effective method and encourages field collectors to be courteous and respectful while on duty.
It can arrange for prior appointments at the debtor’s convenience. This helps to maintain a transparent relationship between lenders and borrowers.
What Licensed Money Lenders Cannot Do
The popular belief is that money lenders use scare tactics to squeeze money out of defaulting borrowers.
While actual instances may not be as extreme, the police have registered similar complaints.
So remember that any contravention of regulations laid out in the Moneylenders Act or Code of Ethics may result in jail time for the perpetrators.
Often, unscrupulous debt collectors use the loopholes in the Code of Ethics to harass debtors.
Here are some things licensed money lenders cannot do:
Harassment, Threats, Or Intimidation
Licensed money lenders cannot employ intimidating tactics on a borrower. They do not have the liberty to threaten, verbally abuse, or publish your details on public platforms.
In addition, they cannot harm or insult anyone concerning you.
The Protection From Harassment Act prohibits the damaging behaviours licensed money lenders could engage in.
The Act also forbids money lenders from cyberbullying you or your family on social media platforms.
Money lenders cannot physically abuse their prospective borrowers.
If they are found guilty, the agency can face a criminal trial. Singapore’s Ministry of Law is strict with the punishments for such offenders.
Even minor offences can land a perpetrator in four to six weeks’ jail.
Therefore, a money lender cannot be violent toward you or your family. It’s illegal if it slaps, kicks, or beats up a debtor.
In such situations, you may dial 999 for the police.
Vandalising Your Property
Licensed money lenders must treat you fairly and respectfully.
For instance, they cannot destroy your property as it is a severe criminal offence. Moreover, they cannot do anything that can distress your property or neighbourhood.
Debt collectors also cannot write, draw, paint, or mark property boundaries. Hanging banners in front of a borrower’s residence is also strictly prohibited.
If the law finds them guilty of such activities, they must pay a fine of $1,000.
According to the Code of Ethics, money lenders can trace a borrower’s whereabouts but must ensure that they comply with the guidelines and regulations.
They cannot follow you or your family members, interfere with your property or watch your every movement.
Neither can they stay in proximity to your residence or your relatives.
If you find them loitering in the parking area or needlessly dropping by your workplace, consider it a violation of the law.
Furthermore, licensed money lenders should never contact you outside of business hours.
Engaging In Unlawful Assembly
The CCAS allows debt collectors to make doorstep collections for the efficiency of financial processes.
However, if the field agent appears with a group of not less than five people, it is an illegitimate gathering.
If you find a group of men barging onto your property to claim their money, you must report it to the police.
The Code of Ethics firmly states that the collector cannot enter the borrower’s property and has to be courteous towards him or her.
Any deviation from this rule may mean prison time.
What Some Debt Collectors May Resort To
Debt collectors work as field agents for specific agencies to recover debts from borrowers. Ideally, they should be courteous and respectful.
However, there are many instances when debt collectors vandalise the borrower’s property.
This falls under the category of licensed money lender harassment.
If you find them following you or forcefully entering your house, ensure that you seek legal help.
CCAS doesn’t support such criminal acts and will punish them if they are found guilty.
Where To Get Help If A Money Lender Harasses You
Usually, licensed money lenders do not violate the code of ethics or the Moneylenders Act. However, if you suffer verbal abuse, physical assault, or any other criminal offence at the hands of a licensed money lender, you must seek help.
Here are three things to do when you encounter such situations:
Contact The Police
The police will decide if a perpetrator has violated the law. They will suggest subsequent steps that could help you lodge an effective complaint.
In some cases, you may apply for a Protection Order or Expedited Protection Order.
Lodge A Complaint At CCAS
CCAS will help you resolve the issue after extensive investigations. Take note that this is only possible if the debt collector or the moneylending agency is a part of the organisation.
However, if you have borrowed from unlicensed money lenders and are being harassed, CCAS would not be able to help you.
Contact The Registry Of Money Lenders
Contacting this government-authorised body can help you with your problem, given you have borrowed from licensed money lenders.
If proven guilty, the agency will not only face legal charges but might also lose its license.
Negotiate A Repayment Plan
Renegotiating your repayment plan can maintain your credit rating and enable you to return the outstanding amount to your money lender.
To proceed with this, engage in a thorough discussion with your money lender and be transparent with your repayment strategy.
You may ask your debt collector to assist you in contacting CCAS.
Alternatively, you can contact Credit Counselling Singapore, a non-profit organisation that helps borrowers manage debts.
A borrower can also apply for the Debt Repayment Scheme (DRS) if they have an outstanding balance of less than $100,000.
However, you can only opt for it if and when the court recommends it.
If you’re looking for an emergency loan from reliable agencies that follow the Moneylenders Act, you can try Credit 21, a reliable licensed money lender.
Don’t Tolerate Licensed Money Lender Harassment
There are always risks involved in financial matters.
In Singapore, opting for a licensed money lender can be a wise decision for your part. However, if you face any harassment by debt collectors, report it.
Always seek help whenever debt collectors or licensed money lenders seem to cross the line. The law of Singapore is strict about its regulations. If any moneylending agency tries to violate the law and physically or verbally abuses the borrower, the perpetrator will be jailed.
As a licensed money lender, Credit 21 believes in lawful debt collection. We always put our customers first and try to help each and every one of our clients. We will treat them with respect, even if they have trouble repaying their loans.