How To Lodge A Complaint Against A Money Lender

Written by Shannon Wong on August 23, 2022

This article will examine the subject of unlicensed moneylending in Singapore.

It focuses on how to make a complaint about a money lender if you have been treated unfairly or even been unfortunate enough to encounter one of the blacklisted money lenders in Singapore.


The business of moneylending goes back to antiquity: an agreement between a borrower and a lender that ideally provides constructive value to both parties in a positive and ongoing way.

In theory, it is a straightforward process that should run its course without issue. In reality, however, due to human nature and the way our world works, it can also be a process fraught with uncertainty and risk for both the borrower and lender.

Doing business with an illegal money lender in Singapore is an extremely dangerous process that can cause one to be saddled with the burden of attempting to repay money at an exorbitant interest rate.

So how do you spot an illegal money lender?

What Is Unlicensed Moneylending?

Unlicensed moneylending, termed “UML” by the Singapore police, occurs when a private organisation lends money without being regulated by any laws in Singapore.

The lender is often informally known as an “Ah Long” in local Singaporean colloquial language; however, the description that perhaps offers the clearest understanding for English readers is the term “loan shark.”

Labelling a human being as a shark may appear like a careless generalisation from a less tolerant era, but the description is more apt than you think.

A loan shark is known for ruthlessness, predatory behaviour, and the potential for serious violence.

We may suffer a lapse of judgment and get involved with a loan shark in Singapore when we need money badly.

But dealing with a loan shark is not worth the temporary reprieve the loan will bring. This is because illegal money lenders, or loan sharks, are known for their predatory beahviour, sky-high interest rates and for stooping to any means to recover their money.

Legal money lenders need to abide by rules set by the Moneylenders Act since they are regulated by the Registry of Moneylenders.

You can find a comprehensive list of licensed money lenders on the Ministry of Law website.

Another dead giveaway is if a lender offers a loan on WhatsApp, SMS, social media or even a call – this is prohibited by law for licensed money lenders.

How Not To Fall For Loan Scams

As mentioned above, being proactive and thinking carefully about financial decisions is always better than making a hasty decision impulsively.

Once you fall victim to a loan scam, you will need to find out how to make a complaint about a money lender in Singapore with the relevant authorities, which can be an arduous process.

Knowing what licensed money lenders in Singapore can and cannot do is worth its weight in gold in avoiding loan scams:

  • Licensed money lenders in Singapore are not permitted to cold call or text a member of the public
  • Licensed money lenders are not allowed to collect any administration fees before the loan has been disbursed.
  • Administration fees are normally simply deducted from the total loan amount given to the borrower after disbursement.
  • Remote verification of a client’s identity – such as using a phone call or text to request a citizen’s Singpass ID or code – is not permitted.
  • The identity of the borrower must be physically verified by the licensed money lender at the money lender’s business address.

There are other types of loan scams too.

Recently, Singaporeans have been warned by the police to be wary of a loan scam involving their Singpass.

Firstly, an unsolicited message with the offer of a loan is sent to the victim’s phone. If the victim responds to the text, the scammer will then ask for the Singpass information for the purposes of employment verification.

The victim is asked for money to cover bogus administrative charges, after which the promised loan never materialises.

Again, this kind of situation happens to people far too often, and is perhaps even more frustrating than an encounter with an unlicensed money lender in Singapore.

The money simply vanishes without trace, and knowledge of how to make a complaint about such a money lender in Singapore is useless.

Unless the police can monitor and trace the communications, the trail is cold.

Unfair Practices Of Moneylenders

Apart from the activities of loan sharks and loan scammers, some licensed money lenders (though not all) may exploit loopholes in the law to take advantage of clients in an unfair way.

Hence, knowing when you need to make a complaint about a money lender in Singapore will be useful and relevant in such situations.

Strictly speaking, the regulations regarding loans by licensed money lenders state the following stipulations:

  • The administration fee should not be in excess of the 10% of the loan
  • Late fees should be capped at $60 per month.
  • The total borrowing cost should not exceed 100% of the loan itself

However, unethical money lenders in Singapore have attempted to get around these rules using techniques such as short-term loans and split loans.

In a short-term loan, often contracted on a weekly basis, the customer is forced to repeatedly pay a 10% fee to “re-contract” if they do not clear the debt.

In a split loan, the loan is split down into different parts – each of which can have a late-payment fee imposed if the borrower misses the deadline.

The Moneylenders Act in Singapore requires licensed lenders to fully inform their clients of all loan terms and conditions, including interest, calculation of fees, and dates of charges in a language the borrower can understand.

In addition to the Act, licensed money lenders in Singapore are required to provide clients with a detailed cautionary statement in writing before the loan is processed.

The cautionary statement warns potential clients of practices such as short-term loans and split loans and gives the client critical information on where and how to make a complaint about money lender in Singapore if the situation requires it.

When To Lodge A Complaint Against A Licensed Money Lender

The aforementioned on unfair practices offers an introduction into when practices from licensed money lenders cross the line into unethical behaviour that knowingly takes advantage of borrowers in financial difficulty.

If a borrower finds himself in a position where he is being exploited by excessively high interest rates, the conditions of the loan appear to have been changed, or financial loopholes are being used by the money lender, then he has every right to apply to the courts in Singapore and ask for assistance.

How To Lodge A Complaint Against A Licensed Money Lender

Claims against unethical behaviour by a licensed money lender can be taken through the courts or the Small Claims Tribunal via the Consumer Protection Act.

According to the Moneylenders Act, the details of the loan agreement between lender and borrower can be reopened by the court, and excessively high or unfair fees can be refunded.

Victims of unlicensed money lenders in Singapore, of course, face a much more difficult task in attempting to recover their losses.

Of course, not all licensed money lenders are unethical. It is crucial to know what to look out for to protect yourself against scams and fraud.

If you need a loan urgently, consider applying for one with 1AP Capital.

The licensed money lender offers its clients security, professionalism, and reliability when applying for and processing loans.

Our team of credit consultants have vast experience in dealing with a wide variety of customer requirements: loans for education, renovation, business, and weddings.

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Our team of consultants are totally dedicated to the needs of each person who reaches out to us, and we will do our very best to help you in your business or personal loan requests.

Get in touch with us today for free advice on getting a loan.

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