Illegal Moneylending Activities

Mr Christopher de Souza asked the Deputy Prime Minister and Minister for Home Affairs (a) whether the punitive, legal and enforcement measures to reduce illegal moneylending activities have obtained significant success; and (b) in view of the growing use of aggressive harassment techniques against innocent neighbours of recalcitrant debtors, whether the Ministry will consider making it an offence to borrow from loansharks to deter demand for these loans.

The Second Minister for Home Affairs (Mr S Iswaran) (for the Deputy Prime Minister and Minister for Home Affairs): Sir, from January to September this year, there were 10,439 unlicensed moneylending and harassment reports. This is 24% lower than in the same period in 2010, that is, a reduction of about 3,200 cases. This reduction can be attributed to the punitive legal measures introduced in the Moneylenders Act last year, as well as the greater level of community vigilance, and effective Police enforcement. Over the same period, the number of persons arrested rose 24% to 1,492 persons.

The Member has asked about aggressive harassment tactics. The number of cases involving aggressive harassment tactics remains low, accounting for less than 0.5% of the total number of cases. The Police have apprehended the perpetrators in nearly 80% of these cases. In all such instances, the Police will press for stiff sentences against the perpetrators, including caning.

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Mr de Souza's suggestion to make borrowing from loansharks an offence, as Members are well aware, has been raised and debated several times in this House. Opinion is divided on the matter, not least because the circumstances of each borrower are very different. It is not conclusive that criminalising borrowing will significantly diminish the loansharking situation, although it might deter some borrowers

Our current focus is on the plethora of other means to tackle the problem. The Police will continue with its stringent enforcement efforts and leverage on the enhanced legal measures. Police will also strengthen its partnership with the community and grassroots organisations to safeguard the neighbourhoods. Education is key in addressing the aspect of demand for unlicensed moneylending. In that regard, the Police will work with stakeholders like MCYS, the Registry of Moneylenders, and the National Council on Problem Gambling. Public education campaigns will highlight the alternative avenues of assistance and also warn those who may be inclined to work for loansharks of the serious consequences of doing so.

I would like to point out that the Ministry and the Police will closely monitor the effectiveness of these measures before assessing the need, if any, to go further. I want to assure the Member and this House that we are certainly prepared to introduce tougher measures if the situation warrants it.

Mr Christopher de Souza (Holland-Bukit Timah): I would like to thank the Minister for his comprehensive reply and also the Home Team for their concerted effort in reducing the figures by 24%. Especially in light of the fact that with two casinos, to have to reduce that by 24% is indeed a feat that should be applauded. Thank you for the effort!

I have three supplementary questions. First, there is a lot of talk that gambling addiction fuels the borrowers to borrow from loansharks. Given that the Minister is from the Home Affairs Ministry, what more can be done to deter a culture of gambling setting root and therefore consequently reducing those who turn to unlicensed moneylenders? Second, how could both the supply and demand aspects of the causes of the crime be further studied so as to reduce the numbers? For example, if the decision is not to criminalise borrowing, then would the Ministry consider levying a charge of aiding or abetting harassment where the borrower purposefully gives the wrong address and as a result, causes an innocent neighbour to be the victim of harassment? Would there be a charge of aiding or abetting harassment there? That is one other way of handling the demand. The third and final point, Sir, is the use of school children. I think there were reports about how brazen moneylenders have used innocent school children to be the runners. How will the Ministry ensure that this is deterred and they suffer a stronger brunt of the law as a result of their actions, ie, the people who use school children and not the school children who are pawns in all of this?

Mr S Iswaran: Mr Speaker, Sir, I thank the Member for his supplementary questions. I also want to preface my response by acknowledging the fact that the Member has been very actively pursuing this matter in this Parliament over several years. Several of his suggestions were, in fact, incorporated in the amendments to the Act last year.

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The Member asked about gambling addiction and what the Ministry of Home Affairs can do to deter a culture of gambling. I notice from the Order Paper, fortuitously, that there is a question on this later for the Ministry of Community Development, Youth and Sports. That is really where the central task of addressing it from the social perspective lies. I think what the Home Team agencies will do, and have been doing assiduously, is really to ensure that there is a tough regime in terms of the crimes that can be associated with this, and then we enforce that with diligence and stringency. That will be the strongest way of ensuring that we are able to contain the criminal aspects. I think the actual social pathology is an area that is differently addressed and it has got a wide range of issues as the Member will well acknowledge. It is not just the Government's effort but also will involve many other parties – VWOs and, of course, homes as well.

The second point is on the supply and demand aspects and what else can we do to reduce this further. The Member specifically mentioned this point about whether we can make aiding and abetting harassment a crime. I think the Member is also aware in the amendments we introduced last year, that there was the point about addresses, in particular. One of the offences, in fact, is really to give the wrong address to the loanshark which would lead to harassment being directed at the neighbour. That attracts a penalty of up to one year imprisonment. I think that is the starting point there. Also, it is an offence if you do not update your address within 28 days in your identity card, and that has a fine of up to $5,000 and jail of up to five years. So, there are certain deterrent provisions and it is really targeted where it should be. It is not so much at the overall borrowing activities but it is specifically at the activities that could create additional problems for people around them.

Finally, the point on school children and what we can do. First of all, there is a fairly comprehensive effort undertaken by the Police, together with MCYS and the schools, to communicate to children in schools and beyond on the kind of dangers it poses and what they ought to or ought not to be doing in this regard.

The Member made reference to some of the recent enforcement actions, and what the findings were. The indication was that most of the time they were involved in the distribution of things like name cards, pamphlets and flyers advertising easy loans from loansharks. They were generally ignorant of the involvement in illegal activity and were enticed by the opportunity to make easy money. I think notwithstanding that, we need to send a strong message to the youth, first of all, that there are serious consequences to be involved in such activities and they should be clear that before following up on such offers, they should do their due diligence and be careful and talk to their parents, and so on. Secondly, I would say that we have also introduced the offence in terms of recruitment which I just want to spell out the specifics – it is a jail term of up to seven years and fine between $30,000 and $300,000. I think that again is a fairly deterrent provision in the law and the Police are committed to enforcing it.

I want to sum up, in response to the Member, by saying that at the end of the day, this aspect of using the youth is something that is reprehensible and the Police will be very rigorous in their enforcement in this matter. But, at the same time, the message to our youth must also be unambiguous.

Mr Low Thia Khiang (Aljunied): Sir, supplementary questions. I would like to ask the Minister: since the amendment of the Moneylenders Act, was it effective in terms of deterrence, and in terms of helping the Police in enforcement? While I noted that he reported that the cases have been reduced, what I want to know is how many new loanshark cases are reported to the Police. Secondly, I would like to ask the Minister whether this activity of borrowing from the loansharks is related to casino gambling habits. Thirdly, is there evidence to suggest from the ground that those legal moneylenders, in cooperation with illegal moneylenders, transfer some of the debts to them and use illegal tactics against borrowers? And lastly, I would like to know what other additional enforcement actions or strategy that the Police have. Because the ground reaction that I have is that the problem does not seem to be solved. It is not going away and, perhaps, it may be coming up more.

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Mr S Iswaran: Mr Speaker, Sir, I thank the Member for Aljunied for his four supplementary questions. Let me take them in turn. The first is, what is the deterrence afforded by the enhancements to the legislation in the Moneylenders Act. If the Member heard my comments earlier, there has been a reduction in the number of reports. It is not just in terms of enforcement. Enforcement has increased and that has resulted in more apprehensions. But there has also been a 24% reduction in the number of reports – harassment and moneylending activities − and that is a reduction of about 3,000. The current level is about 10,000, with the assessment that this is obviously something that we want to continue to bring down, and that is why we have a range of efforts in place.

Secondly, is the borrowing activity related to casinos. Well, if you look at the history of this whole phenomenon, it was relatively low if you look at the incidents of moneylending in 2006 and 2007. About the time of the economic downturn, it spiked in 2008 and 2009. The casinos actually started operations in February and April of 2010. As I have just given Members the statistics, actually the numbers have come down between 2010 and 2011. There are many factors at play here: firstly, the enhanced measures and the Police enforcement; secondly, the economic conditions have changed; and then of course the advent of the casinos in itself, whether it is, in fact, the cause de facto , which we cannot establish with certainty. My response to the Member would be that, yes, we have casinos in the environment today, but I do not think we can establish a clear causative link. It is early days on this, but we are tracking this aspect quite closely.

Thirdly, is there a transfer of activity or interconnection between the legal and illegal moneylenders. This is obviously a boundary condition. The Minister for Law will be addressing the point on legal moneylending shortly. I will just say that clearly, the Police in its enforcement pays very close attention to this because you do not want illegal activities masquerading under the cloak of legality, and that is something that we always monitor. But, at the end of the day, you have to work within the boundaries of what is provided for legally and in terms of enforcement as well.

Finally, on additional enforcement measures, as I have responded earlier to Mr Christopher de Souza, we have put in place a range of measures – enhanced penalties, stricter enforcement, working with community organisations, education. So, it is a combination of measures that have been put in place. There seems to be some traction, so we want to observe this. At the same time, the Police are allocating more resources towards enforcement on the ground. I think we hope to see greater improvements in the coming period.

Mr Lim Biow Chuan (Mountbatten): Sir, the feedback that we frequently received is that CCTV is an effective way to deter such harassment. Indeed, it gives quite a lot of assurance to families that have been harassed by illegal moneylenders. But the reply from the Police is always that it has not sufficient budget for the CCTV. Will the Ministry consider providing a larger budget for the Police to install more CCTVs at places where the harassment takes place?

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Mr S Iswaran: Mr Speaker, Sir, I thank the Member for the suggestion. In fact, this is an area that the Police are looking at. In terms of whether we can allocate greater resources, it is something that we hope to be able to give further information on in due course.