Common Loanshark Scams in Singapore

Are you or someone you know being preyed on by a loan shark?

Currently, there are thousands of loan sharks operating in Singapore. They charge massive interest rates, threaten their clients with violence, and cause millions of dollars in property damage each year.

Most of the time, loan sharks target victims who have already borrowed money from them.

But in recent years, loan sharks have become especially aggressive in their tactics. Not content to just rob their willing victims, they have begun preying on innocent people who never did business with them in the first place. Increasingly, they will target victims by phone or SMS, claiming that they owe them money, and threatening dire consequences for not “paying it back.”

These scams are becoming increasingly common. Even if you have never dealt with a loan shark in your life, they may obtain your phone number and harass you, claiming that you or somebody you know owes them money.

As with all scams, the best defence is information. Knowing the tactics that loan sharks use will help you spot them and prevent yourself from becoming a target.

In this article, we will look at the 3 most common scams loan sharks use, and how to protect yourself. Let’s start with the most common one, the “loan collector scam.”

The Loan Collector Scam.

The loan collector scam is extremely simple, but hundreds of people fall prey to it every year. In this scam, a loan shark obtains a victim’s phone number and begins calling them, claiming that they owe money. They then threaten dire consequences, such as vandalism or assault, if the victim doesn’t pay.

If you get a call from one of these scammers, you might wonder what “loan” they’re talking about. Rest assured, you’re not suffering from memory loss: the scammer is simply calling anybody they can find, hoping they’ll fall for the bluff. Occasionally, the scammer will find somebody who actually does have an outstanding loan, and will pay the scammer whatever amount they ask, thinking the scammer is affiliated with their real creditor.

The solution here is simple: never take calls from someone claiming to be a moneylender unless you know them personally. Simply hang up, block the number, and report the call to the police.

The Licensed Lender Impersonator.

The licensed lender impersonator scam is similar to the loan collector scam. The basic idea is the same, but here the scammer takes it a step further: they will impersonate a licensed moneylender, and insist that the victim owes them money. They will typically make these calls around pay days; since loans are due on these dates, the victim may think they are speaking with their real moneylender, and pay up.

Fortunately, protecting yourself from this scam is easy. If somebody calls you and claims to be your moneylender, do not do anything until after you have CALLED your moneylender, and confirmed that it was actually them. If it was not, then you know you’ve been speaking with a scammer.

The Fee Transfer Scam.

The fee transfer scam is especially dangerous, because it can result in the loan shark getting not only your money, but also your personal information.

The way it works is like this: a scammer will call or SMS you, saying you have been approved for a loan, but need to transfer an admin fee before you can receive it. They will then try to trick you into giving them SingPass access--which which they can access personal information that they can later use to harass or intimidate you. If successful, the scammer has scored a huge win: not only did they get the money transfer fee, but they also got personal information they can use as leverage on you.

Fortunately, this is probably the easiest scam of all to protect yourself against: if somebody calls you saying you have been approved for a loan, just say you’re not interested. In the event that you have actually requested a loan from a moneylender, call them up and ask whether the caller was affiliated with them.

If you aren’t sure whether you’re being targeted by a loan shark, keep in mind the scams outlined in this article. These tactics are all illegal, and would never be used by a licensed moneylender.

Loansharks will often use a licensed moneylender's name, address, licence number and other information to dupe their victims into thinking they’re someone they’re not. To be safe, we recommend that you take the time double check the information provided by anybody claiming to be a moneylender, using the following procedures:

  • Look up the license number provided on the complete list of moneylenders published on
  • Check that the address, name and licence number match.
  • You can easily visit the moneylender's office address stated on the Ministry of Law's website you were provided and easily confirm any real moneylender's business activities. This should tell you whether the person you're speaking with, is really the person they claim to be. If it's not, you may be dealing with a loanshark who is using stolen or "copied" information.

Other Tell-Tale Signs of a Loan Shark Include:

  • Offering to do business without a signed contract (licensed moneylenders are required by law to use contracts).
  • Offering huge sums of money even if you have a relatively small income.
  • Charging exploitative interest rates and fees.
  • Not being listed on the Ministry of Law’s website.
  • Not having a license number (must match the license number on the Ministry of Law's website).
  • Operating without an office (moneylenders are required to have an office by Singapore law). The office must match the one registered on the Ministry of Law website. Additionally, contract for the loan must be finalized and signed in person in the same office.

Whether you have been targeted by these scams or not, remember: hundreds of people are falling victim to them this very minute. These crimes are reaching epidemic proportions, and until now, most of them have gone unreported.

If you want to protect your friends and loved ones from financial crime, share this article. Post it on your social media. Email it to your friends. Send it to your loved ones. Just reading the tips in this article could save somebody from falling victim to a loan shark.