loan sharks

Loan Sharks Tactics in Singapore (2017 Update)

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Loan sharks tactics in Singapore – What you need to know 

Loan sharks are unlicensed moneylenders who issue loans illegally. They often lend money on unfair terms which have exorbitant interest rates. The loan sharks do not abide by the law and use violent and unscrupulous tactics. To give loan and recover money owed. They try to instill fear in their victims by splashing paint on victim’s doors. Or writing and vandalizing stairwells, windows, and doors. Some go a step further and set fire outside the victim’s house. Or use bicycle locks to lock up gates and apartment doors. For somebody who unknowingly falls in the arms of these criminals, it can be a pretty traumatizing experience. 

loan sharks

loan sharks

Should one have cash flow problem and must get quick financing, they should explore available alternatives. There are options like mainstream banks or financial institutions, licensed moneylenders. Also, they can seek personal loans from relatives and friends instead of turning to loan sharks. This is because there is a risk of harassment for the borrower and their loved ones and neighbors. 

Unlicensed and Un-certified dealers  

Not all loan sharks are illiterate, most are sleek and eloquent and usually set up professional looking offices. They advertise in newspapers but not necessarily to loan money. They pose as advisers using phrases like flexible financing options. Once the borrower takes the bait they keep raising the amount owed regardless of the terms agreed. 

Some offer fake courses and training on investment opportunities then in the same breadth offer financing to people who lack capital. Borrowers must conduct due diligence and ask for certification or license numbers when they suspect that the money lender they are dealing with is a shark. 

Quick Daily Loans (Hari Hari) 

This form of loan is called ‘Hari-Hari’ in Malay which means “daily”. It is a gentle form of loan sharking where loan shark target low-income borrowers like casual supermarket attendants or cleaners who are paid on a daily basis. The loan shark then shows up every day to collect a portion of the wages to an extent that an amicable relationship is formed. If the payments fail to come they result to harassment and the carries on indefinitely. Debtors end up paying more than 10 times what they originally owed over a period of several years. 

The selling and buyback trick 

With this scheme, the shark convinces you to sell something to him at a highly inflated price. This could be something like a home appliance or a gold watch or bracelet. The purchase price is equal to the loan requested. The catch is that you will sign a contract saying that you agree to buy back the item from the loan shark at a much higher price later. For example, if the shark bought a gold watch from you for $5,000, they get you to buy it back from them at $9,000 in 6 months. 

If you fail to buy back the item they harass you and handle you like they would handle any other defaulter. 

The Smartphone lease Trick 

With this method, the sharks are no keen to loan large amounts of money because they do not want to hassle chasing you for repayment. Their target is not repayment but in getting you to sign up to for two-year contracts. They give entice you with the money you request for and then ask you to go to different phone dealers and sign up for up to four or five contracts. Once you give them the phones you will never see them again. You have money for one phone but also have the telephone companies chase you for the multiple phone lines. The loan sharks will walk away to sell the phones at much higher rates. 

Gift Card Advance 

The sharks lure their victims by offering instant cash in exchange for purchasing gift cards every month for a tear. For example, if they give you $2,000 you promise to buy six $100 gift cards per month for a whole year. The cards are mostly bogus and can only be used to buy low quality and useless items from the ‘shark’s websites’. These offers will come through SMS or email as ‘gift advance cards’ promotions. Some are money launderers and are looking for a way to clean their money without authorities tracking them.  

Conclusion 

Loans from a mainstream bank or licensed money lender are much more predictable with the transactions and recovery processes professionally conducted.  The loan sharks offer unreasonable interests rate whereas others make it impossible to repay them on time so that they can impose penalties. Further, when they do not get their way with you, they are capable of beating you up or burning down your house. No matter how strong the temptation is, it is never a good idea to turn to loan sharks. In the event that one gets engrossed with loan sharks who have resulted to harassment, they must not give in to unsolicited demands. They must not respond to SMS or threatening emails, instead, this information must be shared with the police either in person or via the online portal 

Credit Review Moneylender Review

If you are keen to avoid loan sharks, you should consider taking a loan from a licensed moneylender. Credit Review is a resource that has all the information you need. About which moneylender is a good one and which ones to be avoided. Read all of our customer reviews to get a better idea of which moneylenders are the ones you can trust. Contact us for any inquiries.

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