In a desperate time of need of money, one may approach money lenders and accidentally end up dealing with a loan shark.
Loan sharks have a notorious reputation in Singapore, and they are still around today. 💰
Usually the last resort for money lending, loan sharks are very troublesome to deal with as they use intimidation tactics and harass not just the borrower, but also their friends and family.
For maid employers, it could make their lives a nightmare when their maid ends up “swimming with the sharks”. 😨
What Loan Shark Mean
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A loan shark refers to an individual/organisation that lends money at exorbitantly high interest rates (typically far exceeding legal limits).
Then, these lenders will resort to intimidation or violent threats to recover the borrowed amount.
In Singapore, loan sharks are illegal money lenders.
Checking For Loan Shark Red Flags
Here are 6 ways to differentiate loan sharks in Singapore from licensed moneylenders, so that you can avoid falling prey to them.
- Loan sharks advertise their loans through SMS, flyers, and emails, which is a violation of advertising rules for licensed moneylenders.
- Willing to lend any amount without looking at your income level.
- Charge exorbitant interest rates exceeding what’s legally allowed.
- Charge a loan processing fee without approving your loan.
- Do not provide a loan contract or may ask you to sign a blank or incomplete loan contract.
- Use threats and abusive language against you.
When encountered with money lenders exhibiting one or more of the above signs, they are likely loan sharks.
Loan Shark Vs Debt Collector
Compared to loan sharks, debt collection is evolving with a greater focus on professionalism and ethical practices.
Agencies now strive to break the stereotype of aggressive tactics by employing empathetic strategies and ensuring compliance with regulations.
Debt Collector:
- Legal entities hired to recover unpaid debts on behalf of businesses or lenders.
- Use negotiation and mediation strategies, focusing on communication and agreements.
- Operate within the law, adhering to industry regulations and ethical practices.
Loan Shark:
- Individuals or groups lending money at illegal, exorbitant interest rates.
- Use threats, violence, or intimidation to recover money.
- Operate outside the law, ignoring regulations and ethical considerations.
Maids Borrow From Loan Shark Out Of Desperation
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Typically, one goes to a loan shark as the last resort, when they need money desperately.
Consequently, the loan shark harassment will then affect not only the individual but also their family members or their sharing house occupants.
This is the case when maids borrow money from loan sharks, causing the employer to send the helper back to the Philippines.
The responsibility to protect the maid now falls in the hands of the employer.
Dealing With Loan Shark Harassment In Singapore
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Report them to the authorities, and if you’ve already informed the authorities, it’s best to leave things in their hands.
Stay calm and don’t yield to the threats of loan sharks.
After reporting your situation to authorities, it should be safer for you to stop making further payments for your debt.
Loan sharks sometimes frighten borrowers by saying they’ll be prosecuted and even sent to prison if they don’t pay up.
However, since loan sharks are transacting illegally, they don’t have the right to receive payments or lend money in the first place.
And avoid showing loan sharks that their harassment and intimidation are working.
Contact Maid Agency For Handling Loan Shark Cases
Do not send the maid home behind her back or coerce her to leave, as that may worsen her financial situation.
Furthermore, it will not help with the loan shark harassment for the time being.
If you enlisted the services of a maid agency to place the helper, notify them about the case as well.
Maid agents have a wealth of experience dealing with loan shark cases and are equipped to help.
Notify the Ministry of Manpower and the police so they can assist in resolving the matter.
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