Be Safe:Loan Scams

03 Jul 2020

01   loan scams

What are loan scams?

In loan scams, scammers pretend to offer loans and loan services to victims by pretending to be staff from licensed moneylenders. They may approach victims randomly through SMS text message or WhatsApp message, offering incentives such as quick loans or larger loan amounts. Interested parties are then instructed to transfer a sum of money as a deposit before the loan can be disbursed  However, after victims transfer the money, the loan never gets disbursed and the scammers often become uncontactable.

In some cases, scammers may try to ask for personal information such as your NRIC, Singpass details and bank account numbers as well; they can use these details to hijack your accounts or perform other unlawful dealings.

02   fake news 

In other instances, scammers would send victims false documents that they claim were issued by government organisations such as the Ministry of Law or the Monetary Authority of Singapore. These documents would inform victims that they were required to pay a deposit and a 7 per cent goods and services tax before the loan gets disbursed. The scammers’ goal is to convince victims that they’re corresponding with a licensed moneylender, so that they will part with their money. Unfortunately, after the payment is made, victims never receive the loan amount.

According to The Straits Times, victims in Singapore got cheated of $6.8 million due to loan scams, from January to November 2019. This number is set to rise in 2020 as scammers become more sophisticated in their tactics. It is therefore important for everyone to be vigilant against these scams.

03   spot scam

How can I spot a loan scam?

  • Be wary of advertisements for loan services on messaging platforms such as SMS, iMessage or WhatsApp. It is illegal for licensed moneylenders to advertise via messaging platforms.
  • Licensed moneylenders are obliged under the law to verify a borrower’s identity and particulars in person at their place of business, before they approve the loan. If a moneylender is approving a grant to you over text message or on a messaging app, it is likely to be an unlicensed operator or a scam. If you are asked to give away your personal information through an online platform, do not do it.
  • Be careful if the moneylender requests for you to pay an administrative fee, processing fee or other payment in order to secure the loan. A licensed moneylender will not ask a loan applicant to make payment before the loan is disbursed.
  • While some licensed moneylenders may charge administrative fees, this fee can only be charged after the loan is granted, and it is usually included in the total amount the borrower needs to pay when the loan is due.

 04   messaging platforms

How can I guard against it?

 05   be safe


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