New measures to curb abuses by licensed moneylenders

New measures to curb abuses by licensed moneylenders

SINGAPORE — In a move to curb abuses by licensed moneylenders, such as offering short-term loans of less than one month so borrowers have to repeatedly re-finance, the Registrar of Moneylenders has issued new measures to be implemented immediate effect.

Among the directions issued, licensed moneylenders will have to provide borrowers with a cautionary statement that has to be signed by the latter before any loan can be granted.
“This is to prevent the snowballing of debts, which borrowers might have difficulty repaying,” said Ministry of Law in a statement today (Jan 26). The Registry of Moneylenders is a department under the Ministry of Law.

This comes after some licensed moneylenders were found to offer short-term loans of less than one month so as to collect more administrative fees when the loan is repeatedly “renewed”. Some falsely informed borrowers that they could be granted only weekly loans under a “new law”.

Some licensed moneylenders would also split one loan into two or more smaller loans, so that a late fee of S$60 can be charged for each small loan.
Under the Moneylenders Act and Rules, licensed moneylenders must inform borrowers of the terms and conditions of the loan, including how interest and fees are computed and when these will be charged.

Licensed moneylenders found to be in breach of the directions will be investigated and dealt with accordingly, said the ministry.

Enforcement measures such as the suspension or revocation of licences, warnings and prosecutions, will be taken when moneylending laws are breached.

Those convicted of breaches of the Moneylenders Act and Rules face a fine and/or an imprisonment term on each charge.