ILLEGAL MONEYLENDING

ILLEGAL MONEYLENDING

3.

Mdm Halimah Yacob asked the Minister for Home Affairs (a) how many cases of illegal moneylending and harassment had been reported over the last one year; (b) is the number of reported cases increasing; and (c) what measures have been taken to give better protection to those being harassed by illegal moneylenders.

Mr Wong Kan Seng: In 2004, about 5,800 cases of illegal moneylending (IML) and harassment activities were reported. This was an increase of about 460 cases from 2003. Compared to the increase of about 2,300 cases from 2002 to 2003, the IML situation has improved. In fact, the situation has stabilised since April 2004. The average number of cases reported per month from May 2004 to December 2004 was about 420. This is a decrease from the same period in 2003, which averaged 520 cases per month.

Enforcement efforts

The Police takes a serious view of all reported cases of illegal moneylending and harassment. Its priority is to cripple syndicates involved in illegal moneylending activities.

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In 2004, Police successfully crippled five moneylending syndicates. The total number of persons arrested for both IML and harassment activities has increased from 330 in 2003 to about 390 in 2004.

Police has now established a taskforce dedicated to tackling IML and harrassment activities and is exploring several measures to curb them. These include the use of the Criminal Law (Temporary Provisions) Act to detain not just syndicate leaders but loanshark runners as well, the Income Tax Act to prosecute illegal moneylending syndicate leaders, and the Corruption, Drug Trafficking and Serious Crimes Act to confiscate their assets and to deny them the illicit proceeds to re-start their IML activities when they are released from jail.

Police has discovered that illegal moneylenders have made use of foreign workers to open bank accounts and purchased pre-paid phone cards under these workers' names to allow the loansharks to operate freely and harass debtors, making it difficult for the authorities to trace them. Police is thus working with telecommunications firms and banks to implement measures to curb the ability of loansharks to use such tactics.

In addition, Police will continue to give priority to investigations involving illegal moneylending and harassment cases, particularly those involving innocent victims who are not debtors, and step up enforcement efforts against runners and syndicate members who harass debtors. On the ground, Police is studying the use of Closed Circuit TVs and the Community Safety and Security Programme to deter and apprehend "harassers". In addition, Police is exploring introducing mandatory minimum sentences for illegal moneylending and harassment in order to press for deterrent sentences. The Police will continue to leverage on the Vandalism Act which provides for the caning of loansharks who vandalise public property.

Other measures

Apart from enforcement measures, the Police is also working with various government agencies to explore upstream measures to deal with this problem. This would include studying the impact of our moneylending legislation, social policies and public assistance schemes on the IML situation. Other initiatives being considered include enhancing public awareness on prudent financial planning as well as increasing the scope and accessibility of credit counselling services and mandatory credit advice for borrowers of large loans. These measures would help to reduce the demand for illegal moneylending and the downstream consequences such as harassment.

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