Moneylenders act amended on 1st June 2012

Rules governing moneylenders in Singapore are being tightened to further improve protection for borrowers, especially for those in the lower-income group.

The Moneylenders Act has been amended to strengthen the enforcement powers of the Registry of Moneylenders and safeguard borrowers' information from unlicensed moneylenders.

The change means the registry can now engage any person, for example, auxiliary police officers, to help conduct more frequent and thorough enforcement checks on moneylenders.

The amended law makes it a criminal offence to share information on borrowers with unlicensed moneylenders. It is also an offence for moneylenders to carry on their moneylending business at an unauthorised place of business regardless of when it commenced.

Senior Parliamentary Secretary for Law Sim Ann said changes are also made to the Moneylenders Rules.

The changes include mandating the use of an Effective Interest Rate instead of a Nominal Interest Rate for loans borrowed.The Effective Interest Rate takes into account the compounding effect of the frequency of the instalments, thus, better reflecting the actual cost of borrowing.

Meanwhile, three fees which moneylenders currently charge are removed.

They include fees for the acceptance or renewal of a revolving credit loan, a fee for accepting the loan application, and a fee for payment not being made by the electronic funds transfer.

The rules will affect nearly 243 moneylenders in Singapore and take effect from the June 1 this year, to give the industry sufficient time to adjust to the changes.

Now the law change seem to impact these moneylenders to come up with more tricks and explore the loopholes. Without acceptance fee and other 'hidden' charges.. How far can they go now?

The aftermath of non advertising

Things seems gone quiet after the authorities banned these legal moneylenders to advertise on newspaper, tv and SMS.
They explore other way by acting on existing customers. Simply asking them to collect some statements and even telling them for their current promotion.
These group of customers are already the foundation of their business.

There are still new customers though but a lot of marketing gimmick is no longer available to lure them into their business.
In the nutshell, people who are new to borrow from them is now spreading all over and even the market,
No matter what, these loanshark can still advertisement on the website which 2 of the best known moneylenders are doing all along.

Yes they have the lowest monthly interest in the market but please include the acceptance fee which is now stablize at 20% of your loan amount. So it is actually the minimium 20% interest aka acceptance fee u have to pay even when they claim 0% interest when u repay in 7 to 14 days. .