Have you ever had those moments where life throws you a curveball and you’re left scrambling for financial solutions? In moments like these, licensed money lenders in Singapore are often the go-to choice for many individuals in need of easily accessible loans.
However, when seeking financial assistance, it’s essential to be aware of your rights and how to identify licensed money lender harassment. Let’s look at what licensed lenders are allowed and not allowed to do, as well as get in on how to report money lenders if they violate the rules.
What Are Money Lenders Legally Allowed To Do When Recovering Debts From Borrowers?
In Singapore, all licensed lenders are registered with the Ministry of Law and listed on their website. This means that lenders inside the official list of licensed lenders are all legitimate and expected to operate within the bounds of the law.
They have specific ways they can recover debts from borrowers, like using debt collectors, sending letters of demand, or meeting you in person at your home or workplace to talk about repayment plans. However, it is recommended for licensed money lenders to use the least intrusive method when contacting the borrower, and to only escalate the mode of contact when necessary.
Choosing to borrow from licensed money lenders adds an extra layer of safety and security to your financial dealings. You can expect to be treated with fairness and respect, ensuring a smoother and more trustworthy borrowing experience.
What Is Considered Licensed Money Lender Harassment?
Licensed lenders are required to keep it professional when chasing debts. This means that they are prohibited from engaging in harassment, intimidation or threats towards borrowers.
Actions considered as harassment by money lenders include causing physical harm, harassment, threats and intimidation, unlawful stalking and vandalising, damaging or seizing your property.
No matter how late you are in repaying your loan, nobody is allowed to physically hurt you or threaten your safety in Singapore. If this does unfortunately happen, you have the right to report the money lender to the police.
Let’s say your creditors send someone to your home to discuss your debt, but things escalate and you’re physically attacked. For causing hurt voluntarily, The person responsible could face serious consequences, including a maximum of 3 years in prison and/or a fine of up to $5,000.
How Do Debt Collectors For Licensed Money Lenders Typically Collect Debts?
Now that you’re clear on the do’s and don’ts of debt collecting, let’s take a look at what lenders do when a borrower defaults on their payments.
Typically, they handle the collection of money from borrowers directly. However, if someone doesn’t pay back what they owe, they might ask for help from licensed debt collectors to get their money back. Here’s what they are allowed to do:
Sending you letters of demand
A letter of demand is akin to a polite yet firm reminder from the money lender. It’s like a nudge saying, “Hey, don’t forget about that loan you took out”. This letter outlines the amount you owe, the deadline for making payment, and what might happen if you don’t pay up. It’s usually the first step in the process of debt collection, giving you a heads-up that it’s high time to make your payments.
Reach out to your family about your debts
When you’re in a tough spot, it can feel intimidating to admit to your creditors that you’re unable to make your loan repayments on time. They might resort to calling you or reaching out on social media. If those attempts don’t work, they can contact your family members and inform them about your loan situation.
Visiting your home or workplace
Money lender harassment is not legally allowed, but they can send a licensed debt collector to your home or workplace to see you. Visiting your residence should only be considered when other forms of non-face-to-face contact have been exhausted, and visiting your workplace is the last resort.
Rest assured, they will come in peace to find out the reasons why you haven’t made the timely payments as agreed upon in the contract you signed before your loan disbursement, and perhaps come up with some feasible solutions that might work for you.
Discuss loan repayment alternatives
Sometimes, you’re just down on your luck, and you can negotiate repaying your loans with the debt collectors in good faith. Propose a manageable repayment schedule that you’ll stick to, or ask the debt collectors for other repayment alternatives (e.g. Debt Repayment Scheme).
Are There Instances Where Debt Collectors Indirectly Cause Licensed Money Lender Harassment?
Unfortunately, yes. While legal lenders and debt collectors are expected to follow the law, there may be some errant collectors who resort to scaring you to pay up.
This includes pressuring or threatening you to make payment, or even spray painting your walls. However, this is considered money lender harassment and you should report it to the authorities immediately.
Do note that since debt collectors are engaged by licensed lenders, their undesirable behaviour (if any) will implicate them too, at risk of being penalised.
What To Do If A Money Lender Is Threatening Me?
Report money lender to the Registry of Moneylenders
The first step in dealing with licensed money lender harassment is to report the money lender to the Registry of Moneylenders. They will investigate the matter, and inform you if the lender is indeed breaking the law. If found guilty, appropriate action will be taken against them.
Tip: To help the Registry of Moneylenders with the investigation, do furnish them with as many details as possible in your report, such as the actions that transpired, when and where the incident(s) happened, etc.
If the offence falls under the Protection of Harassment Act, you might be advised to apply for a Protection Order or Expedited Protection Order against the lender. This guarantees your safety and buys you time for debt repayment.
Seek help from the Credit Collection Association of Singapore (CCAS)
You can file a complaint to the CCAS if you’re facing harassment by the money lender. They will act as a mediator between you and the lender. You can seek their advice on how to solve your issues (e.g. help you negotiate a new loan tenure to make repayments easier).
But, for CCAS to be able to help you, the licensed lender or debt collector must be a member. That means, if you borrow money from an unlicensed money lender, it is out of their hands for sure.
Should I Be Worried About Money Lender Harassment When Borrowing Money?
If you are borrowing money from licensed lenders like Goldstar Credit, you don’t have to wonder if they’ll threaten you if you don’t pay up on time. Goldstar Credit is a law-abiding loan company in Singapore that treats borrowers with the utmost respect. We understand that something may crop up sometimes, and we always ready to help; we have zero tolerance for any form of licensed money lender harassment, too.
Now that you’re informed about what’s considered money lender harassment, do your research by scrutinising money lenders reviews and only borrow from licensed lenders, pay your loans on time and know that they will have your back when you need help.
Need a loan? Apply online now or chat with us to find out more!
