Licensed money lenders provide an essential service by lending to those who are looking for fast cash to cater to various needs. 

With a licensed lender, you can get the cash you need fast so you can sort out your emergency quickly.

However, sometimes things go wrong, and you are unable to pay your loan on time. The licensed lender may begin harassing you in a bid to make you pay the debt although it is against the law to do so. 

You start receiving calls and messages incessantly. The money lender may even start calling your family and friends, informing them of your pending loan.

So what should you do when you experience licensed money lender harassment? 

If a licensed lender harasses, intimidates, or fails to adhere to the regulations, you have every right to seek help. 

In this article, we look at what licensed money lenders are allowed to do, what constitutes licensed money lender harassment, and where you can seek help against such harassment.

What Licensed Money Lenders Can Do

Licensed money lenders are regulated by the Moneylenders Act. So they must follow the set regulations. Here are some things that licensed money lenders are allowed to do. 

Explain The Terms And Conditions Of The Loan

A licensed money lender must make sure you understand the terms and conditions of the loan. It must explain terms such as the repayment amount, payment method, interest rate, and any other details about the loan clearly to you. 

Charge Up To 4% Interest On The Loan

Under the Moneylenders Act, licensed money lenders are allowed to charge borrowers up to 4% interest per month. 

Even if you fail to repay your loan in time, the lender can only charge a late interest rate of 4%.

Advertise Only On Permitted Platforms

Licensed lenders are permitted to advertise their services on three platforms – in their office locations, in print and online consumer directories, and on their websites. 

The lender must ensure the advertisement is factual.

Lend To The Borrower Based On Their Income

A lender is allowed to lend borrowers money based on their income level. A borrower who earns an income of less than $20,000 per year is qualified for a loan of up to $3,000.  

Borrowers who earn more than $20,000 per year can qualify for a loan that is six times their salary.

Involve Debt Collectors 

A licensed money lender is allowed to use debt collectors to follow up on the money owed. When collecting the money, the debt collectors must use the right ways to collect the money without harassing a borrower. 

Debt collectors are regulated by the Credit Collection Association of Singapore (CCAS).  It has a code of conduct that each debt collector must follow when collecting debts.

Institute Legal Action Against A Defaulter

If a borrower defaults on a loan, a licensed lender can take legal action and charge him or her fees for doing so. The borrower can be sued by the lender if he or she does not commit to paying the loan. 

Ensure The Privacy Of Your Data

Licensed lenders must ensure the data you provide as a borrower is secure. 

The lender has the responsibility of guaranteeing the privacy and confidentiality of your details. Lenders are not allowed to share your details with other lenders.

Renegotiate Payment Terms

A lender can renegotiate your payment terms if you are facing financial difficulties. It’s advisable to approach the lender and request to renegotiate the payment terms as soon as possible.

What Licensed Money Lenders Can’t Do 

Under the Moneylenders Act and Rules, licensed money lenders are required to follow the regulations. In this section, we look at some of the things they are not allowed to do.

Harass, Intimidate, Or Threaten A Borrower

As per the rules, a licensed lender is not allowed to intimidate, threaten, insult, or abuse a borrower. The lender is not allowed to harass the borrower even if he or she defaults on the loan. 

In the event of default, the lender and debt collector are required to act decently toward the borrower.

Stalking The Borrower

The lender or debt collector is not allowed to stalk or follow you during the debt collection process. If the lender does any of the following, you have the right to file a complaint.

• Following you or a member of your family to where you live or work
• Communicating with you through any means necessary
• Watching you or your family
• Sending groups of debt collectors to your home to follow up on the debt. Debt collectors must be ethical when collecting debts.

The lender or the debt collector are also not allowed to loiter around your home or office. They are not allowed to do things that may endanger your safety. 

Injure A Borrower

Lenders or debt collectors are prohibited from causing hurt to borrowers. In the event of an injury, , you have a right to report it to the police even if it’s minor. 

The offence may result in jail time.  

Vandalise Your Property

A lender is not allowed to vandalise your property by spraying or damaging it. It will be fined for the offence.

Take Your Property

Lenders are not allowed to take your property, even if you owe them money. 

If you have used your property as collateral, the lender must follow the law before it can confiscate your property. Report any lender who attempts to take your property to the police.

What Some Debt Collectors Might Do

There are no laws regulating debt collectors in Singapore, but they are expected to act ethically while collecting debts. However, debt collectors can do the following to make you pay your dues:

Contact You Any Time

Debt collectors can call you at any time to remind you of your dues. They can also visit you at your place of work to remind you to pay your debts. 

Plus, they can talk to your spouse about your outstanding payments.

Renegotiate A Payment Plan

If you are facing financial difficulties, debt collectors can renegotiate a payment plan. Work with the debt collector and come up with a payment plan that works for you. 

The debt collector acts as an intermediary between you and the lender. Once the lender approves the renegotiated plan, make sure you make your payment promptly.

Where to Get Help If You Are Harassed by a Money Lender

Most licensed money lenders will adhere to the code of conduct. They are reasonable when collecting debts. However, should you experience any form of harassment, injury, or property destruction, here is what you can do. 

Report The Lender To The Nearest Police Station

Reporting the lender to the police will clarify whether the lender or debt collector has followed the law when collecting debts. 

If it is confirmed that the lender or debt collector has harassed or intimidated you, you can apply for a protection order or expedited protection order. 

Going to the police keeps you from danger. You also get more time to reorganise your finances and repay the debt.

Make A Complaint To CCAS

If a debt collector has acted unethically towards you, visit the CCAS and file a complaint. You can also renegotiate the terms of your loan with the representatives of CCAS. 

However, the debt collector you are reporting must be a member of the association in order for action to be taken.

Renegotiate Payment Terms

To avoid being harassed by money lenders, try renegotiating your payment terms. This may come with additional fees, but it gives you time to repay smaller portions of the loan.

File For Bankruptcy

If your debt is over $15,000, you can file for bankruptcy. When you file for bankruptcy, the lender will not be able to take legal action against you. 

If your debts exceed $150,000, you can choose a Debt Repayment Scheme (DRS). 

Under the DRS scheme, an official will help you craft a debt repayment plan. Under the DRS, you will have to commit to paying your debts as per schedule. It is important to note that DRS is recommended by the court once a borrower files for bankruptcy.

But before you file for bankruptcy, make sure you have exhausted all other means. Once you file for bankruptcy, you will not be able to access other loans, or apply for permission to travel overseas, among other restrictions. 

Your credit score will also be severely affected.
 

Licensed Money Lender Harassment Is Not Acceptable

It’s important that you have all the information you need before you apply for a loan so you can  protect yourself from the illegal actions of licensed lenders and debt collectors.

Now you know what to do if you encounter licensed money lender harassment during debt repayment.

At BST Credit, getting a loan does not have to be stressful. As a reputable and trusted licensed money lender, we do not tolerate any form of mistreatment to our customers. 

In fact, we believe in treating them with respect and compassion. We follow the Moneylenders Act and Rules and take pride in offering the best services to our clients. 

Get in touch with us now or apply for a loan using your Singpass today. It just takes five minutes.