Illegal to borrow from loan sharks soon?
Sun, Apr 19, 2009
The New Paper

By Amanda Yong, Geraldine Yeo, Lediati Tan

BORROW from loan sharks and, in addition to dealing with thugs, you will soon have to answer to the law.
Minister for Home Affairs Wong Kan Seng revealed this move yesterday.

It is welcome news for innocent victims of harassment from loan sharks. Many who never took money from them have been victims of abuse and vandalism.

This often happens when they move into a home previously used by borrowers.

One such victim, Ms C Tan, an administrator in her 20s, said: "I definitely support it.

"This way, at least the person who borrowed the money from loan sharks won't walk away scot-free."

Another victim, Madam Grace Tan Geok Peng, 36, a medical sales executive, agreed.

"The borrower was the one who initiated the whole thing. They should bear the consequences," she said. "It will make people who want to borrow from loan sharks think twice."

Madam Tan told The New Paper that her family's ordeal started two to three months after moving into a four-room flat on Ang Mo Kio Avenue 4 in August.

She found her front door splashed with green paint, and the name and IC number of the wife of the previous owner, which matched the name on her housing documents, scribbled on the wall.

Her husband then called the phone number that loan shark left on the wall to explain that they were the new owners.

Said Madam Tan: "The loan shark told my husband that they don't care as they only go after the unit. They gave us two choices: Either pay up or get hurt."

Returned five times

After that incident, the loan shark returned another five times. Even her neighbours weren't spared - two of her neighbours also had paint splashed on their doors.

Fearing for their safety, the family of five, including their two daughters aged 2 and 10, and their maid, chose to live with a relative for a month.

Despite reporting the matter to the police, and installing a camera to capture images of the culprit, the harassment continued.

When she approached HDB, she claimed HDB advised her to wrap up her front door and gate with a plastic wrapper to minimise the damage from the paint.

She said she also approached several MPs about her case.

"Whatever I should do, I have done already," said Madam Tan.

She was more angry with the previous owner than the thugs who harassed her family.

The younger Ms Tan suffered a similar predicament. She, too, discovered that the previous owner had borrowed from loan sharks after her front door was splashed with paint on 8 Apr.

She, too, filed a police report and approached HDB for help, hoping they could write to the owner on their behalf. But she was told that it was not their practice.

When she tried to call the owner, they got into a quarrel and the conversation ended on a bad note.

She said: "The owner told me it was just my bad luck to buy his flat.

"There's nothing I can do against him, and he knows that. For desperate homeowners like me, where no help is available, are we destined to suffer as scapegoats in silence?"

This will change if borrowing from loan sharks is made an offence.

Lawyers The New Paper spoke to said that under the current system, the only recourse for victims is against those harassing them. There is nothing they can do against the borrowers.

It is difficult to go after the previous owners, said Mr Amolat Singh, as it is not a crime to borrow money.

He said that even if they were to secure a written assurance from the seller that he did not borrow money from loan sharks, the seller can still claim they did not borrow from illegal moneylenders when they signed the contract.

Property agents, too, can't be held liable, said Mr Subhas Anandan of law firm KhattarWong.

This is because buyers must prove that the agent knew the sellers were in trouble with the loan sharks.

He added: "The law should be enforced against those borrowing. It may stop people from borrowing. It takes two hands to clap - if we start taking action against those who borrow, we may find that the problem will become less."

But lawyer Luke Lee disagreed.

He said: "They are already down and out, no further action should be taken against them."

Even if these victims sue the borrowers and win the case, said Mr Lee, the borrowers may not have the money to pay, and the victims would still have pay for the law suit.

The issue of punishing borrowers was raised by Mr Christopher de Souza, MP for Holland-Bukit Timah GRC, in Parliament last year.

He suggested that borrowers who supply false addresses to loan sharks and those who borrow illegally to gamble - should be prosecuted.

When contacted, Mr de Souza said he fully supported the decision to go after the people who borrowed irresponsibly at the expense of innocent parties.

"Up till now, the laws have attempted to tackle the supply element in the offence of loan sharks, without tackling the demand side. This is never going to solve the problem," he said.

"We have to tackle the supply side simultaneously with the demand side - that was what was missing from the Moneylenders Act."

In response to The New Paper's queries, a spokesman for HDB said that when residents complain about vandalism or harassment by loan sharks, it asks the police to investigate.

She said that buyers could check with their housing agents whether the flats they are buying are affected by loan shark harassment.

But property agents The New Paper contacted said it is difficult to check whether people selling their flats were in trouble with loan sharks as there is no proper record.


Nipping the problem in the bud

By Amanda Yong

TARGETING borrowers in addition to loan sharks would be a decisive move against the illegal activity.

Home Affairs Minister Wong Kan Seng said in a speech at the annual Police Workplan Seminar yesterday: "This will hold borrowers accountable if their reckless borrowing or gambling habits endanger the safety and security of the community."

Many borrowers eventually join the loan shark's criminal organisation as runners to carry out vandalism and harassment. "We therefore need to stem the problem decisively in the bud," he said.

The police handled 3,993 cases of unlicensed moneylending harassment cases in the first three months of this year. This is almost double the number of 2,066 cases for the same period last year.

This jump in such cases was "in tandem with the deteriorating economic situation", Mr Wong said.

Police plan to install more closed-circuit television (CCTV) cameras at "harassment prone sites" to catch loansharks and harassers in the act.

Amendments to the Moneylenders Act were passed in Parliament last November. Earlier, only those whose bank account or ATM card was used to collect debts was liable for punishment. Now, even those who use telecommunication services like mobile phones or pagers for this activity are liable.

First-time loan sharks face a maximum fine of $200,000 and a two-year jail term. Repeat offenders can be jailed up to five years.

Loan sharks who damage property can be fined up to $40,000, jailed for up to three years and caned up to four strokes. When caught again, caning is mandatory and an offender can get up to six strokes.


This article was first published in The New Paper.


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