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What to Know About Loan Scams on the Rise in Singapore
8 January 2025 | Monetium Credit
Key Takeaways
Singapore is a fast-growing force with a booming economy in many sectors, and due to its fast-growing environment, many individuals become victims of scams. There are a plethora of industries targeted by scammers, however, in the rows to follow, we will focus on how to identify and avoid loan scammers by understanding what we have to know about the rise of such fraudulent tendencies.
Learn how to recognise the signs
Undoubtedly, scammers will take advantage of people in need, people who aim to regain their financial stability or simply people who plan to expand their businesses with the help of a rapid loan. Therefore, there are possibilities for many to fall victim to a loan scam in Singapore due to the rise in such fraudulent activities, however, to ensure you don’t fall victim to these types of scams, it is imperative to look for specific signs. According to GovTech Singapore, scammers pretend to be legal loan agencies and ask for certain fees, however, after paying their due fees the victims either become cyber-attacked or find no means to contact the pretended moneylenders and lose their already paid fees. In order to avoid these kinds of situations, there are specific signs you must pay attention to:
- Aggressive marketing with emphasis on WhatsApp and/or text messages
- Dubious and unsecured websites
- Insistent phone calls
- Pressure to pay the requested fees before even completing the loan application
Following and recognizing these signs beforehand might aid you in avoiding scammers taking advantage of you and your dear ones when deciding to apply for a loan. It is worth mentioning that people with bad credit scores are much more susceptible to scammers as they have tendencies to apply for loans without researching first. Should you find yourself in the position of having a bad credit but want to maximize your chances of getting approved, we recommend you go through our educational article: How Can You Increase the Chances of Getting Approved for a Bad Credit Loan in Singapore? By doing so, you will gain knowledge on the matter and avoid being a scam victim.
Identify potential scammers and report them
Identifying and reporting scammers are part of human responsibility, if it happened or nearly happened to you, imagine that it can have a devastating effect on others, too. Therefore, if you come faced with a situation where you have identified a potential scammer, please do not hesitate to report them to the authorities, you can do it online or by phone.
If you are wondering where specifically to report a loan scam in Singapore, here are a few options that might help you along the way:
- Police hotline for these unfavorable situations: 1800 255 0000
- Online police services: I-Witness E-Service
- If you have the ScamShield App downloaded on your phone or tablet, you can submit a form directly through the app
Commencing a scam report, although it might seem unnecessary after you have blocked the scammers, will actively help and protect other people, which is why we encourage every person who might have encountered loan scammers to take action and report them accordingly to minimize potential damage to a larger scale.
Stay alert
Whilst we recommend staying alert, firstly, we emphasize the crucial need for customers to only engage with certified moneylender agencies. Whether you need to apply for a personal or business loan, it is imperative to acknowledge that a loan scam in Singapore can be avoided using legal and prestigious loan agencies, agencies that genuinely care and offer clear communication channels with their customers, providing them with all the necessary information at all times. Furthermore, we recommend remaining vigilant when opting for secured, unsecured or cheap loans.
1. Secured:
According to Money Helper, there are many pros to a secured loan, among those, you are able to secure your goods which will determine you to be on time with your payments and enhance your responsible behavior. On the other hand, if an unforeseeable event occurs in your life and you are not able to honor your repayment, it may cause you to lose your secured assets. While a secured loan might promise a larger sum than an unsecured loan, they are also more susceptible to scam tactics to attract their victims. Hence, we recommend a thorough analysis of the loan type and, evidently, the agency you are applying to, to ensure it operates legally.
2. Unsecured:
Unsecured loans fall back to the category we call ‘personal loans’. Applying for a personal loan may, at times, be overwhelming and many individuals lose their bits of patience and forget to stay alert of possible scammers. It is one of the main reasons why we recommend verifying every money lending agency, especially the digital lending agencies. Moreover, it is essential to learn how other digital lending agencies operate and discover the ones that suit you the most. If you want to learn more about the structure, aim, and operational part of digital lending agencies, please check out the About Us section on our website.
3. Cheap:
Firstly, we must understand what a cheap loan is and the structure behind it. Sometimes, you might find yourself in financial difficulty or simply wishing to buy something that is out of your budget limit, here is where this type of loan comes in handy. These kinds of loans take less time to process and rapidly solve the client’s needs, however, many of them might fall into the category of a loan scam due to their rapid nature of processing. That is why we recommend staying alert when opting for a cheap loan. Regardless of the amount you opt for, staying alert is mandatory and beneficial for you.
Information, balance, and order
By now we have covered the crucial part of remaining vigilant concerning any possibility of a loan scam in Singapore, and the time has come to inform our audience about the means of finding the necessary and most significant information they can obtain regarding their loans, legal agencies, and detailed credit reports, too. Therefore, for any individual who has ever applied for a loan in Singapore, we advise them to familiarize themselves with the moneylender credit bureau organization.
Restoring order in the moneylending industry
Since its incorporation in 2016, the MLCB organization has been dealing with restoring the balance and order of this industry. The organization aids both parties in equal measures while also keeping track of all borrowing activities, offering clear and concise information to both borrowers and lenders to aid with financial decisions on both sides.
Lenders
In order to avoid lending money to individuals who might not be able to repay accordingly, the MLCB provides the lenders with a detailed credit history of the borrower in case. With the information provided by the MLCB, lenders can base their decisions faster and much more accurately. Thus, making the entire process work efficiently towards both parties and avoiding any potential scams.
Borrowers
Borrowers can request detailed reports of their credits, this aids the borrowers in gaining better management of their financial status. The report that borrowers can request from the moneylender credit bureau contains the following information:
- Repayment status and repayment history
- Personal information (NRIC)
- Real-time updates regarding loans of any kinds
- Employment records
- Bankruptcy records (if applicable)
Tips to staying safe
By now you, most probably, have become acquainted with the damage a loan scam can project on individuals, however, it is important to understand that damage in numbers. Hence, in 2024 there was a loss report revolving around 385.6 million SGD which the Singapore Police Force made available with the purpose of informing the public on this impactful issue. Therefore, it is our moral duty to teach our audience a few tips that they can use to ensure they don’t become victims of scammers:
- Ministry of Law: The Ministry of Law (MinLaw) is an organization that serves society and ensures legal access to justice. Whenever in doubt concerning the legal activities of any moneylender agency, make sure to check the official and updated lists of the agencies you are planning to borrow your money from, they must be licensed and appear on the list.
- Checking with your Bank: Checking with your bank is essential, especially if you are unsure of the phone calls, emails or texts you are receiving. With a quick phone call to your bank, you can avoid being a scam victim and also report the perpetrator.
- Sensitive data: Sensitive data are never to be shared, especially by phone or email. Among the data we recommend NOT to be shared are your bank account numbers, NRIC, and authorization codes.
- Preparing for your loan application: As previously mentioned throughout this article, loan applications may be stressful and can take a lot of time, especially if you are a first-time applicant, but being a first-time applicant has its downsides as inexperienced individuals may overlook important details and fall victims to loan scam procedures. That is why we recommend to follow the above tips and remain vigilant. Also, if you need to better understand what steps to prepare for when you apply for your first loan, please access our article dedicated to first-time applicants here: How to Prepare for Your First Loan Application.
- Double-check: Double-checking any relevant information is one of the best tips we recommend to our customers and our broad audience. Whether it is your data or any agency’s, double-checking will do no harm and it will guarantee your safety.
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Have you been scammed?
Considering the unfortunate event that you have been a victim of a scam, it is essential to follow the given instructions and call the police. We kindly advise you not to blame yourself for being the victim of such unlawful activities. This can happen to every individual and, in past years, scammers have been renewing their methods, seeming much more credible and linking their fake sources to real ones. This is why we can’t emphasize enough the importance of double-checking, remaining alert, and the importance of research beforehand.
Get in touch and ask questions
Asking questions when in doubt can provide important information regarding your concerns. It is vital to always ask questions if you feel insecure about a loan application. Concerning scams when applying for loans, we also recommend asking as many questions as possible, and if you have doubts regarding the agency you borrow money from or if you are not convinced with the answers you receive, double-check everything once again to reassure yourself. The entire process should take more time but prove to be legitimate and certified than to be quick and fraudulent leading you to fall victim to scammers.
Another important factor we would like to instruct you to focus your attention on is to check the achievements and awards of the legal agencies you apply to. It is important and beneficial for any customer to acknowledge the accomplishments of their lenders. Should you want to see outstanding achievements over the years of our activities, please check out our Awards section on our website.
Scam protection experts
The purpose of this article has been achieved by demonstrating to our customers and general audience that there are always ways to protect themselves against scammers. We took the responsibility upon ourselves to educate everyone on the importance of remaining safe against scammers and aiding them into becoming scam protection experts by first informing them on what to know about the rise in these types of activities, and secondly, by providing them with the necessary educational tools like tips for protection, information on where to look for legal advice, specific signs to follow and means of reporting when applicable. Please follow our instructions and remain safe from scammers at all times, report when necessary and contact your loan provider and bank if you need to.
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