Everyone, regardless of age and education level are susceptible to scams. The most common being e-commerce scams and loan shark scams.
Loan shark scams are pretty widespread throughout Singapore. These scammers prey on people looking for a way out of their financial instability. Don’t fall victim to these loan shark scams. It’s fairly straightforward to protect yourself from loan shark scams. All you need to do is understand how they work.
Thousands of loan sharks are operating all throughout Singapore and calling gullible would-be victims as we speak. Though the convention of loan sharks is to target people who already borrowed money from them in the past, this is fast changing.
Loan sharks are getting much better in aggressively pushing their offers to unsuspecting people who are in need of money. Loan sharks will build their own websites to scam victims of their money. They will also call victims or send SMSes asking if they need money.
Obtaining phone numbers is an easy job. Gathering financial data on the money you owe or understanding your overall financial standing are both also easy.
Keep an eye out for red flags and tells that these scams have. In this article, we are going to explain how you can protect yourself and your money from loan shark scams. Information is the best defense here.
Without further ado, let’s dive right into it.
What Are The Basic Strategies Of Loan Shark Scams?
Before we move on to more elaborate and mechanical loan shark scams, here are a few common tells that all loan shark scams have. If you spot any of these red flags then remember to tread very cautiously, if you happen to go along with it.
Strategy #1:
Sometimes, loan sharks will ask you to do business without signing a contract first. Note that licensed moneylenders are obliged to use contracts by law. If anyone claims to be a licensed moneylender and still doesn’t use a contract then it’s a red flag right there.
Strategy #2:
These loan sharks will sometimes claim to be registered and licensed moneylenders. There’s no problem in getting loans from licensed moneylenders. Research is the best weapon here. All licensed moneylenders are listed on the Ministry of Law website. Here’s how you can tell scammers apart from the real ones.
- If a moneylender isn’t listed on the Ministry of Law website then don’t deal with them. Simple as that. These are loan sharks and scammers who you should avoid at any cost. If they pester you, you can report them to the authorities or simply block their calls.
- If an apparently licensed moneylender is operating without a registered office then they are not licensed. Singapore law obliges any licensed moneylender to have an office. The Ministry of Law lists the address along with the name of the moneylender. Their registered address should match the one on the website. If they have the same address then it’s your duty to first visit them and talk to them face-to-face as claiming to call from a specific address is easy.
- Just like a registered address, the Ministry of Law also requires any licensed moneylender to have a license number. Double-check the license number and see if it matches the number given on the website.
Strategy #3:
Loan sharks and scammers often inflate their offers to make them more lucrative. You feel like you cannot pass on such an opportunity. Know that if an offer seems too good to be true, especially without any logical reasoning, then it’s most likely a scam. This strategy includes:
- Providing huge sums even if you have a relatively small income. If the moneylender doesn’t seem to care about your income, they are essentially not caring about the repayments of their own loans – which is counterintuitive no matter which way you look at it from. Avoid such deals.
- Providing a decent sum but charging a high interest rate and having multiple fees associated. Sometimes these charges are borderline exploitative. So, even though you think that you are getting a sweet deal, you are actually being exploited and you will ultimately end up paying significantly higher than what you would have paid with a licensed moneylender or bank.
With those common tells out of the way, let’s move on to more advanced loan shark scams that are happening to hundreds of people around us every day.
Loan Collection Scams
The modus operandi of most loan collection scammers is to cold call people and demand repayment for loans. You might or might not have a loan. It doesn’t matter. They will threaten you with dire consequences such as harassment if you don’t pay up.
In case you are pretty confident that you don’t have a loan you will simply shrug them off. That’s the right way. But at other times, these scammers find people who actually owe money or, are looking to borrow.
The scammers will of course not have the exact details of the loan amount, terms, or even the name of the creditor. If you receive such a call then get them to confirm such details. If they can’t, then it’s time to hang up.
Hundreds of people end up paying such scammers thinking that they are talking with the real creditor. Install the Truecaller app on your phone, it can give you a heads up if you receive a call from a known or likely scammer.
Also, only pay to creditors you personally know. You will of course have the contact details of the point of contact for your real loan. Talk with them and get the number checked from them. If they weren’t the ones to call, you can block the number and report it to the police.
They Will Impersonate A Licensed Moneylender
Sometimes these loan sharks will call people (usually on paydays as those are the days when most repayments are to be made) masquerading as a licensed moneylender. If you owe money to a moneylender and they get the name straight, you will almost fall for the scam.
It’s always recommended to put them on hold or ask them to call later while you confirm whether the number belongs to a licensed moneylender.
Remember, a licensed moneylender will need you to physically sign a loan contract to disburse your loan. They will also have a physical shop.
If they don’t confirm the number then now you know that you had been talking with a scammer. Don’t pick up their calls, block them, and report their number to the police.
Fee Transfer Scams In Singapore
This scam is pretty common. A loan shark will contact you via a phone call or SMS and tell you that you have been approved for a loan.
Step 1:
Did you inquire about a loan? If not then simply block the number. If yes, then:
Step 2:
Contact the moneylender or bank to check whether or not the phone number is affiliated with them. If yes, then you’re all good. If no, then block the number and report it to the police.
These loan scams work by requesting a transfer fee, service fee, advance, or admin fee before you can get the loan amount in your bank account (which is of course a lie – you will not get any loan). Furthermore, they also ask for your SingPass access.
Once successful, they have not only managed to extort money from you but they have also acquired your personal information – which can be used to target you for additional scams or as leverage against you.
Wrapping Up On Loan Shark Scams
Note that the information including the license number and registered office address of any licensed Singapore-based moneylender is available online freely on the Ministry of Law website. Any loan shark can impersonate as the licensed moneylender and their information will seem to check out.
The correct way to determine whether it’s a scammer or a real licensed moneylender is to directly call the moneylender using their official contact details. If they don’t confirm affiliation with the phone number you received a call from then it was a scammer.
Always block any known scammer numbers before reporting them to the police.
Another solution is to download the ScamShield App. As the name suggests, it helps you to block unsolicited calls and messages.
Copying information from legitimate sources such as the Ministry of Law website or a moneylending firm’s official website is easy. That’s why you have to up the game if you are looking for a loan. Always visit the registered address and only contact moneylenders using their official contact number and details.
If you really need a loan to settle your financial emergency, you should make use of reliable loan application sites.
Do not give out your personal information, financial records, or transfer any amount to any stranger before establishing their correct identity, and always remain alert! More questions on loans? Read here.