5 Scammy New Tactics to be Lookout for Loan Sharks

5 Scammy New Tactics to be Lookout for Loan Sharks

Loan sharks in Singapore have been keeping up with all the times. Watch out for these scammy tricks to prevent dealing with the unlicensed money lender.

As technology advances, so do offenders. And there’s been a spate of unlicensed money lenders or loan sharks in Singapore who have kept up with all the times.

Actually, a few of these use tactics sneaky and so subtle, Singaporean borrowers do realize they’re dealing with loan sharks.

1. The Phone Line Trick

This method is utilized by loan sharks to dispense small-scale loans (e.g. S$1,000 to S$3,000). Many loan sharks can’t be bothered chasing down loans with this size. It’s too much commitment to vandalize houses or send threatening letters just to get a couple thousand dollars. What exactly do they do?

They let the telephone companies chase you.

By using this method, you are provided by the loan shark with a small amount of money, enough to pay for a handset plus a phone line. You’re told to visit SingTel, M1, or another telco, and obtain a two-year contract. This generally includes a brand new, marked down hand phone (the cost of the hand phone can even go down to $0 with specific plans).

The loan shark will give you some money for the telephone – say $1,000 for an S$1,300 phone. They might have you sign up for four or three more lines and go to different telecommunications, based on how much you really need. For instance, in the event you need S$4,000, then have you sign up for four phone lines.

After this, you’ll never see them again.

Needless to say, you are now saddled together with the invoices for multiple phone lines. The way you pay that is none of the loan shark’s concern.

Some loan sharks give the scheme a fancy name, like buyback” and a “smartphone lease, in which you can make cash now. This leads some folks into thinking they have been coping with a company that is legitimate. In fact, it may merely be an unlicensed money lender who’s using the telecommunications to absorb the threat of small loans.

2. Gift Card Loan

This occurs more frequently in Taiwan and Hong Kong, but be vigilant in case it is encountered by you locally. Via the purchase gift cards, repayment comes under this scheme. For example:

You are given S$3,000 by the loan shark. In return, you swear to purchase five $100 gift cards, every month to get a year. Yes, that means effectively paying S$6,000 for an S$3,000 loan. Loan sharks are not known for low interest rates.

The gift cards may be valid cards you must pass to the loan shark (e.g. AliPay cards), or they may be gift cards bought from the loan shark. In the latter instance, the gift cards are worthless, or can be used to ‘purchase’ rubbish like buffs and old rice cookers from your loan shark’s ‘business website’.

You could get this offer as a sort of ‘gift card advance’ programme or via electronic mail, over SMS.

Make no mistake, this is loan sharking. The main reason gift cards are used will be to disguise repayment. Among the problems with loan sharking is that they need to launder cash – it’s easy for the authorities to track them. They’re able to get cash without alerting authorities or banks, through the use of gift cards.

It additionally deceives some borrowers into believing it’s some sort of firm running a promotion.

3. Masquerading as a Financial Institution that is Valid

In Singapore, every accredited moneylender must show their license number. Still, loan sharks today are a lot more slippery. Not all of them talk Singlish and kind in sentences that are broken. Many are eloquent enough take out suitable newspaper advertisements, and to set up professional looking offices.

These don’t explicitly say that they’re loaning cash, and might use phrases like ‘flexible financing options’. And as with some other loan shark, it’s extremely difficult to pay them back. They’re going to keep raising the amount you owe, no matter the maths.

Some may also ‘attach’ themselves to companies that are ethical. For instance, they may tie up with a scam seminar that provides fad investment in diamonds, trees, or gold. These loan sharks then hang around the lobby, offering financing (read: loans) to people who lack the capital to ‘invest’.

Consistently check for some form of certification, whenever you’re offered that loan. You’re coping using a loan shark in the event that you don’t see it.

4. The Sell and Buyback Trick

This was common in Malaysia although regulation has made it more challenging. Nonetheless, it has been rediscovered by some millennial loan sharks, and relish the veneer of legality it provides.

Under this particular scheme, the loan shark consents to buy something at an extremely inflated price. This can be commonly something similar to gold or a watch. This can be bought at a cost equal to the loan you need from you.

Nevertheless, you have to sign a contract saying you agree to buy back the piece in the loan shark in a higher cost later.

If you get rid of the window-dressing, like a contract or maybe the fact that the loan shark wears a tie, this can be still just a loan.

You will end up harassed as any debtor, when you don’t help make the requisite buyback. Don’t be fooled into believing you’re dealing using a legitimate company.

5. Hari Hari Loans

Hari-hari is for ‘daily’. This is a ‘gentle’ form of loan sharking, in so far as it may possibly be gentle.

Loan sharks do this for low income borrowers, including stall assistants or cleaners who might be paid.

These loan sharks frequently have a more amicable relationship with their debtors. They may cultivate relationships because they view the debtor, and almost never fail to get paid. If group becomes hopeless, nonetheless, they’re going to still resort to harassment.

Furthermore, the group has a tendency to carry on nearly forever. Debtors can find yourself paying 10 times the things they owe, over an amount of many years.

Stick to Valid Loans from Banks

This is often repaid. Loan sharks have rates of interest that are extortionate, and some make it flat out impossible to refund them.

Moreover, in case you certainly cannot reimburse the bank, you will not be come to by physical harm. Nonetheless, burn your house down or a loan shark may well not be unwilling to beat you up.

Regardless how strong the temptation, don’t turn to loan sharks. And don’t pursue ‘exotic’ financing options from firms that are unregulated. Remember, not all loan sharks walk around taking sticks, and assembly in back alleys.

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