Money lender scams have become increasingly prevalent in Singapore. It pays to know how the latest money lender loan scams are executed so we can take steps to avoid becoming victims ourselves.

Read on to learn more about money lender scams, how to spot a scam, how to protect yourself against money lender scams in Singapore, and where you can find a reliable and good money lender in Singapore.

What exactly is a money lender scam?

A money lender scam is essentially a loan scam where the perpetrator pretends to be a legal money lender.

Money lender scams in Singapore are extremely common these days; scammers often lure their victims via SMS, messaging apps like WhatsApp and Telegram, phone calls, and online or social media advertisements offering loans with terms that sound too good to be true.

Take note that these scammers are audacious and have no qualms about lying about the legality of their services. In a bid to gain your trust, many even go so far as to claim that they work for licensed lenders.

Money lender scams in Singapore: Victims’ real-life accounts

Loan scam #1: Scammer threatened to chop up the victim when victim changed his mind

This loan scam details how a scammer tried to seal the deal without sending the victim an agreement, despite being requested. The scheme involved confusing money transfers and ridiculous ‘trial loans’.

Upon learning that it was a scam, the victim proceeded to cancel the loan. Not only was the victim asked to pay a ‘cancellation fee’, but the scammer also threatened to harm the victim since the victim had initially provided the scammer with his NRIC and payslip.

Loan scam #2: Victim lost $42,000 and did not receive the loan

Loan contracts and documents can be faked, as shown in this loan scam. The loan officers could not be contacted, and the loan disbursement did not happen. The victim lost a whopping $42,000.

Loan scam #3: Scammer repeatedly asked the victim to pay for ‘loan insurance’

This loan scam details how an unscrupulous scammer had no qualms about preying on an unsuspecting victim’s insecurity to cheat him.

The scammer first asked the victim to pay a $500 ‘loan insurance’ for a $4,000 loan that would discharge him of liability should he be in a personal accident or die.

The scammer then ‘accidentally’ extended his loan to $8,000, hence requiring another $500 payment for ‘loan insurance’, which the victim paid. Due to a ‘transfer to a wrong account’, the scammer convinced the victim to make another $500 transfer.

The victim was promised he would get his $1,500 back, along with the $8,000 loan, but nobody knows if he did.

Loan scam #4: Scammer threatened to harm the victim’s family

This loan scam is about a scammer who got furious when the victim rejected his loan offer and threatened to call the police.

The victim was contacted via a cold call asking if he needed a loan. The scammer also knew the victim’s address and threatened to harm his family.

Loan scam #5: New scam tactic challenges victims’ ego

This loan scam originated online on Locanto SG. It details a new scam tactic that challenges victims’ egos in a bid to make them take up loans.

How does this new tactic work? Instead of demanding upfront fees, the scammer insisted on depositing a sum of money into a potential victim’s bank account to ‘test the potential victim’, which the victim was supposed to return in a week with 50% interest. When the victim refused the offer, the scammer continued to harass him.

It’s warped, really. There’s no such thing as a free loan. The scammer was luring the victim to get an illegal loan with extremely high interest. It is also possible that the scammer tried to use the victim’s bank account for illegal activities, such as money laundering.

How to protect yourself from money lender scams?

1. Ignore any unsolicited loan offers and advertisements

Unsolicited loan offers come in all shapes and sizes — most commonly via SMS, messaging apps like Telegram and WhatsApp, social media platforms, and online advertisements. Experts in money lender scams also use cold calls to reach potential borrowers.

The most important things you should do to avoid money lender scams in Singapore are:

• Ignore unsolicited loan offers and advertisements
• Block and report the number on which the offer or advertisement appeared, if possible

As it stands, according to the Registry of Moneylenders’ guide for borrowers, licensed lenders in Singapore are not permitted to advertise through all the above-mentioned platforms. Those annoying messages that keep popping up are highly likely to be from illegal money lenders.

2. Seek financial help only from banks or money lenders registered with the Registry of Moneylenders

If you need to take out a loan to tackle an emergency and you have no choice but to turn to borrowing from an entity that isn’t your family or friend, definitely only get the loan from a bank, financial institution, or licensed lender registered with the Registry of Moneylenders to avoid getting tangled up in messy money lender scams.

3. Ask for an in-person loan disbursement at the registered office

Licensed lenders in Singapore are required by law to meet borrowers at their approved business address to conduct physical face-to-face identity verification —as well as a simple credit assessment— before a loan can be disbursed. While they can certainly give you an in-principle loan approval online, they are not allowed to disburse loans remotely.

If a money lender refuses to meet you in person or divulge their business address to disburse the loan to you, something fishy is definitely going on.

Additionally, take note that legal lenders will never make you pay an upfront administrative fee before a loan is disbursed — they will only deduct the fee from your loan principal at the time of disbursement.

4. Do not fall for too-good-to-be-true promises

Money lenders who are out to scam often dole out too-good-to-be-true promises such as unlimited loan amounts, instant remote cash loan disbursement, 0% interest loans, fully online loan transactions, no credit check loans, etc. Do not fall prey to such sweet nothings.

5. Always make sure to verify the legitimacy of a money lender

Another important thing you can do to prevent yourself from getting into money lender scams is to ensure your money lender is legitimate.

Make sure the money lender you’re dealing with is on the Ministry of Law’s list of licensed money lenders.

Pay attention to the money lender’s following details:

• Licence number
• Registered landline number
• Registered business address
• Registered business website(s)

Ensure that your money lender’s contact details tally with official information found within the registry. Why? Well, scammers may impersonate legal lenders by using their names and licence numbers. Some even create fake websites that look just like legal money lenders’!

Where can you find trustworthy authorised lenders in Singapore?

CompareSing helps you to gather loan quotes from top-rated authorised money lenders in Singapore the easy and free way. All you need to do is fill out the simple online form and wait for legal money lenders to reach out to you regarding your loan enquiry.

The authorised money lenders that we work with are all pre-vetted by us — they are 100% legal and adhere to all money lending regulations set by the Registry of Moneylenders.