According to The National Crime Prevention Council (NCPC) Singapore, in the first half of 2019, the crime rate went up by 7% mainly due to a rise in scam cases. Out of those, loan scam has been one of the top five scams in the period between January to May 2019. Approximately 579 fraud loan cases have been registered in this period amounting to a loss of S$1,983,885.
Due to the rising expenses, Singaporeans find themselves in need of borrowing money at some point in their lives. Now, when taking the personal loan in Singapore has become an easy way to raise funds, various segments still do not have access to this avenue due to a poor credit rating. There are situations like medical emergencies or needs related to financing your home and car, where you are eagerly in need of money and are unable to do so from legitimate financial institutions due to stringent regulations. These scenarios often lead loan seekers towards other sources for raising funds, which sometimes traps you into a vicious fraud or scandal.
Scammers bring attractive schemes to hoax needy people. However, below are certain things that you can look up to secure yourself of these fraud schemes in Singapore:
Predatory Lending – Loan Sharks
Loan sharks usually target those people who are not able to raise funds from legitimate sources such as banks because of their poor credit rating. As soon as you will attempt to find other sources to arrange funds, this group of loan sharks will find multiple ways to get in touch with you via aggressive advertisements on public transport and even through online platforms. According to the Monetary Authority of Singapore, it is illegal for licensed moneylenders to advertise via SMS or WhatsApp though. Once you are caught in their tricks, you will see a drastic change in their behavior and as they do not follow the set rules and regulations by regulatory authorities, they will charge you exorbitant interest rates leaving you in a much larger debt at the end of the day
Guaranteed Online Personal Loans
Guarantees that offer you low interest personal loans before evaluating your income, credit score or any other personal information is probably a scam. Many times, it has been seen that these guarantors seek for your personal information mostly through online sources for deceitful purposes. In order to detect the authenticity of these companies, you should take into account some of these basic indicators:
- Presence of their brick and mortar store along with the online platform
- Has a registration certificate from the Monetary Authority of Singapore
- Not promoting its schemes through any avenues of advertisement
High Volume of Uninitiated Contact
These pretenders will send multiple phishing emails and make phone calls from time to time to offer fast and hassle-free online personal loans to the people who are desperate to raise funds. Although, legitimate lenders never opt this way to reach out to the new customers as taking an initiative for approaching to the customers has been declared an illegal activity in Singapore. Therefore, if you get any SMS, WhatsApp notification, email or a phone call, just ignore them completely and report them to the relevant authorities.
Asking for Upfront Fees
Upfront payment frauds usually require you to pay an upfront application fee prior to providing the loan to you. They will give you multiple reasons for justifying the reasonability of the fee or sometimes, even justify it as collateral required due to your bad credit. Additionally, you may be asked to submit your credit card or debit card credentials or even bank account details under a reason of transferring the loan amount directly. However, licensed moneylenders never ask for your personal card or bank details.
Such moneylenders are sharp and take advantage of the fear of borrowers through such tactics. Hence, be careful of these malicious campaigns and always opt legitimate sources for raising funds.