In an era where financial transactions are integral to daily life, understanding the nuances of dealing with money lenders is important.
Legalised money lenders in Singapore, under the purview of regulatory frameworks like the Moneylenders Act, provide a legitimate avenue for borrowers seeking financial assistance. However, with the rise in fraudulent and illegal entities masquerading as legitimate lending institutions, it becomes crucial to discern the genuine from the deceitful.
Empowering oneself with knowledge on rights and procedural steps for lodging a complaint against a money lender ensures proactive safeguarding of personal interests. From conducting background checks on prospective lenders to attempting amicable resolutions before resorting to formal complaints, borrowers wield agency in navigating financial disputes.
What is licensed moneylending?
According to the Moneylenders Act, a licensed lender carries out the business of licensed moneylending under a legal framework that clearly defines borrowing limits, avenues for recourse, and permitted business activities.
All licensed lenders in Singapore have to have a registered licence under the Registry of Moneylenders; the list of legal lenders is publicly available online.
These licensed lenders are usually the preferred choice for borrowers looking for loans that require less stringent credit checks.
In general, licensed lenders in Singapore offer an array of personal and business loans — this could include loans for education, medical purposes, holidays, credit cards, debt consolidation, or even freelancer loans.
Recognising a licensed lender
Firstly, a licensed lender will have a licence certificate — this is something you can look out for at their registered business premises. Furthermore, licensed lenders have to use specific communication channels such as an official landline and website registered with the Ministry of Law. Communications from unknown numbers or unverified online platforms are likely to come from unlicensed lenders.
Next, you will be required to sign a loan contract before a loan is disbursed to you — and this contract will be explained to you by a loan officer. Unlicensed lenders might not present you with a contract at all or they might lead you to sign a contract with vague and confusing terms.
Licensed lenders are also required to verify the identification of borrowers physically before approving and disbursing loans. Unlicensed lenders might prefer to deal with you remotely and might not require you to have your identity verified.
When to lodge a complaint against a money lender?
While a licensed lender is expected to follow the strict set of rules and regulations set out in the Moneylenders Act, not all of them will follow the rules to a T.
Hence, it is important to know the rules and know when to make a complaint against a money lender should the situation call for it. Some of the following actions that are cause for complaint include:
1. Harassment and intimidation
It is prohibited for licensed lenders to issue threats or use intimidation tactics during the debt collection process. If your money lender harasses or threatens you, you can lodge a complaint against the money lender with the Registry of Moneylenders.
2. Charging a higher interest than 4%
Licensed lenders are only allowed to charge up to 4% interest per month. If your money lender is charging more than 4% interest monthly, they are going against the law.
3. Failing to issue a loan contract
It is mandatory for a licensed lender to issue a loan contract before the loan is disbursed, and it is the job of the money lender to ensure that the borrower understands the contract in entirety.
If there is no contract issued with clear terms, the money lender is flouting the law, and you can report the lender to the Registry of Moneylenders.
Is it easy to lodge a complaint against a money lender?
Yes, it is a fuss-free and easy process.
How to lodge a complaint against a money lender?
There are many avenues to seek help, if you find yourself needing to make a complaint against a money lender. Here are some steps you can take prior to making the complaint.
Ensure that a money lender is licensed before borrowing
It is important to do a background check on the money lender before engaging with the lender, to prevent unpleasant situations from cropping up.
Step 1: Attempt to resolve the issue with your money lender
Before rushing to make a complaint, the first step would be talking to the lender and attempting to sort out the issue in a cordial manner.
Step 2: Collect the necessary information for the complaint
Equip yourself with all the necessary information necessary for the investigation. This could include the amount you have borrowed, the interest rate and administrative charges agreed. Having the contract that you signed on hand will be important as well.
You will also be required to furnish details about the money lender, such as its licence details, contact information and business name.
You may also need to attend an interview at the Registry of Moneylenders to provide additional information to facilitate a comprehensive investigation.
Step 3: Lodge your complaint
Now that you have all the necessary information, you can confidently lodge a complaint with the evidence that you have.
You can call the Registry of Moneylenders at 1800-2255-529 or send them a message via their online channel. Simply select ‘Registry of Moneylenders’ under the Main Category, and ‘Feedback & Complaints’ under the Sub-Category fields to start.
There is also the possibility of following up on the matter through the court, during which the case will be handled under the Consumer Protection (Fair Trading) Act or via the Small Claims Tribunal.
You may be required to sit in on an interview with the Registry’s officers to provide them with all the relevant information and documents related to your loan transactions and dealings with the money lender. Throughout the process, you can rest assured the Registry will not disclose your details to the money lender in question without your consent.
Conclusion: Safeguard your own interests and know when to make a complaint
The first step to safeguarding your own interests is knowing your rights and what to do in situations where you feel that making a complaint is absolutely necessary.
In a landscape where trust and compliance are of utmost importance, it’s reassuring to know that a licensed loan company like 111 Credit exemplifies accountability and respect in our operations.
Whether you’re in need of a personal loan or debt consolidation loan, rest assured that 111 Credit can be relied upon to provide transparent and responsible lending services. Apply online now or chat with us today!
