New advertisement rules for moneylenders

By Sophie Hong
my paper
Friday, Oct 14, 2011
Advertisments by licensed moneylenders promising "fast and easy cash", "instant approval" and "low interest rates" will be prohibited from Nov 1, as a result of new measures introduced by the Registry of Moneylenders and Pawnbrokers.

Senior Parliamentary Secretary for Education and Law Sim Ann, who announced this yesterday, said the new measures are aimed at tightening the regulation of licensed moneylenders and safeguarding the interests of borrowers.

A spokesman for the registry said: "Based on our monitoring of the conduct of the business, we felt that more needed to be done to ensure professional conduct among industry players."

Under the new directive, licensed moneylenders are allowed only three advertising channels. They can do so through business and consumer directories in print or online media, via their business website and on the premises of their approved place of business.

Any other forms of advertising, such as on fliers, in text messages and even newspaper classified ads, will be illegal.

Besides regulating where licensed moneylenders can place ads, the registry also laid out directives on the ad content.

For example, licensed moneylenders are required to state a fixed telephone line - if they wish to include a contact number - instead of a cellphone number.

The ads must not have misrepresentations, omissions of material fact, and information which cannot be verified. They must also not create unjustified expectations or have graphics that convey inaccurate impressions.

Licensed moneylenders who advertise beyond the three allowed channels may be fined up to $20,000, have their licences revoked or suspended, and have their security deposit of $20,000 forfeited.

Those who breach the rules on ad content may be fined up to $20,000 and face a jail term of up to six months.

"In 2009, we lifted the restriction on advertising, with the intention of allowing the borrower to obtain information about licensed moneylenders, as well as the loan interest that they offer, so that an informed decision can be made on the part of the borrower, before he or she decides to take up a loan," said Ms Sim.

However, more aggressive advertising was observed after that, she added.

"This brings about another concern, which is that with excessive advertising, it may inadvertently encourage people to borrow beyond their means to repay, and encourage a reckless borrowing culture."

For more information on the new measures, visit www.ipto. gov.sg