MONEYLENDERS (AMENDMENT) BILL

Column No : 1831

MONEYLENDERS (AMENDMENT) BILL: Order for Second Reading read.

3.23 pm

The Senior Minister of State for Law (Assoc. Prof. Ho Peng Kee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time".

Objective of Bill

Sir, this Bill seeks to amend the Moneylenders Act by introducing higher penalties to curb the rise in illegal moneylending activities and related harassment cases.

_Background
_

In 1993, we introduced a number of measures to deal with unlicensed moneylending activities. These included:

(1) enhancing penalties for carrying out unlicensed moneylending activities and related harassment cases;

(2) classifying these offences as seizable and non-bailable;

(3) subjecting debt collectors who are hired by illegal moneylenders to thesame penalties as the illegal moneylenders; and

(4) making illegal moneylenders and debt collectors liable to be caned up to six strokes.

Sir,the number of unlicensed moneylending and related harassment cases, however,continues to rise from some 1,500 cases in 1995 to almost 6,000 cases last year, ie, about a four-fold increase.In some instances, parties who did not borrow money were also harassed. For example, new occupants of dwellings that were formerly occupied by debtors, and people who had lost or misplaced their identity cards. In addition, the number of arrests made in unlicensed moneylending and related harassment cases increased by almost 20% in one year, from 330 arrests in2003 to393 arrests in 2004.

Sir, we must tackle the rise in illegal moneylending cases resolutely, adopting a comprehensive approach. On the enforcement front, police has formed a dedicated Anti-Unlicensed Moneylending Task Force in June this year. With this task force in place, police will take a more focused approach in intelligence-gathering and investigations against unlicensed moneylending syndicates.

Next, police intelligence has uncovered a distinct pattern of higher-tier loansharks operating from overseas after being punished, in order toescape police detection. Therefore, MHA has put in place measures to deny convicted higher-tier loansharkstravel facilities for 10 years from the date of their release.

Sir, on a wider front, MHA is also collaborating with other agencies, such as Minlaw, MAS, HDB and IRAS to curb unlicensed moneylending activities.

In addition, MHA will continue to reviewlegislation to better empower police to deal with the syndicates. For example, we have provided powers under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act to confiscate benefits derived from unlicensed moneylending activities.

_The proposed amendments
_

Sir, as for these amendments which are under consideration, Parliament should send a strong signal to loansharks that we will not tolerate the conduct of unlicensed moneylending activities, where exorbitant interest rates are charged and borrowers and even non-borrowers are harassed in their own homes.

Therefore, this Bill seeks to increase the penalties for unlicensed moneylending under the Moneylenders Act as follows:

First, the existing fines for offenders who carry out unlicensed moneylending activities or harassment cases will be doubled;

Secondly, the meaning of "harassment" will be refined to make it difficult for any accused to argue that an isolated act does not constitute harassment;

Thirdly, in harassment cases, first-time offenders who, in the course of harassment, cause damage to property or hurt to person will beliable to caning; and

Fourthly, repeat offenders of illegal moneylending will be subject to mandatory imprisonment, whilst repeat offenders of harassment where hurt to person or damage to property is caused will be subject to mandatory caning.

Sir, people who use a corporate entity, such as a company, to carry out unlicensed moneylending activities will not be able to hide behind the corporate veil. If such activities are carried out with their consent, connivance or neglect, they, as well as the corporate entity, are liable to be prosecuted for the offence of illegal moneylending.

Bank accounts are now used by runners to collect debts on behalf of unlicensed moneylenders. Debtors are increasingly being asked to make interest and principal repayments of their debts by depositing them into bank accounts. Such arrangements make it difficult for the police to detect unlicensed moneylending activities. As such, a new provision will create a presumption that any person whose bank account or ATM card has been proven to have been used in the collection of debts by an unlicensed moneylender is presumed to have assisted in the carrying out of unlicensed moneylending activities. But, of course,this is a rebuttable presumption.

In line with the higher punishments proposed, we are also making it clear that offences under the Act will be tried before the District Court.

Conclusion

In conclusion, Sir, these amendments are needed to send a strong signal that the Government has zero tolerance for unlicensed moneylending activities. The enhanced deterrent effect should also help stem the increase that we have seen in such activities.

Indeed, the amendments are part of a larger exercise to update the Moneylenders Act. Thisbroader review, which addresses issues other than unlicensed moneylending, should be completed by early next year. So there is a possibility we will come back to the House for further amendments to the Moneylenders Act.

Sir, I beg to move.

Question proposed.

Mr Speaker: Order. I propose to take the break now. I suspend the sitting and will take the Chair again at 3.50 pm.

Sitting accordingly suspended

at 3.30 pm until 3.50 pm.

Sitting resumed at 3.50 pm

[Mr Speaker in the Chair]

MONEYLENDERS (AMENDMENT) BILL: Debate resumed.

Mr Ahmad Khalis Bin Abdul Ghani (Hong Kah): Sir, I support the Bill.

The two main technical thrusts of the Bill are, firstly, to enhance punishment for illegal moneylenders and those who assist them, including runners and collectors, and secondly, to enhance the powers of the court in dealing with illegal moneylending cases. But what is more important, Sir, is for us to note the socio-political aspects of the Bill.

In the last few years, as the Senior Minister of State has acknowledged in his speech earlier, illegal moneylending cases have increased and indeed have become more visible. This probably coincided with the economic downturn in the last few years. We see more cases of vandalism related to illegal moneylending. All of us are now quite familiar with this conspicuous "owe $, P $" graffiti sprayed at our HDB flats, which means owe money, pay money. Translated, it means youowe illegal moneylender money, you better pay them back. And this is normally followed by the person's address, sometimes, name and telephone number.

There is a need to stem this discernible rising trend. Sir, such vandalism causes much embarrassment to the victims, especially if the victims are innocent. And as the Senior Minister of State has acknowledged just now, there are cases where non-borrowers have been made victims. These could be tenants who have moved into the house of the previous borrower or persons whose identity cards have been used.

Sir, the victims, whether innocent or otherwise, feel threatened by this graffiti or acts of vandalism. Why is this so? Because all of us have heard stories of debt collectors using their runners to break flower pots, to spray paint or splash paint on front doors ofalleged borrowers, even to start small fires outside or sometimes, even inside the homes of purported borrowers. Therefore, this passes a message that if a victim does not pay up, collectors are willing to do more than just to vandalise, ie, to cause more damage to property and also to the person of purported borrowers. Therefore, this early vandalism amounts to an assault,a threat, nothing less. Spraying words, such as "owe money, pay money" is a precursor to the more damaging acts and is therefore part of the threat process. We need laws and punishments to reflect the real nature of such harassment.

Sir, perhaps it is helpful for us to compare the proposed section 33 of this Bill with present laws on related crimes. If we take a look at the section on assault, ie, section 352 of the Penal Code, an assault, Sir, if I may just remind everyone here, is defined as making any gesture or any preparation intending or knowing it to be likely that such gesture or preparation will cause any person present to apprehend that he who makes that gesture or preparation is about to use criminal force to that person and that person committing the offence is said to commit assault.

Assault carries punishment of imprisonment of up to three months or a fine of up to $500or both. Another offence of causing hurt,section 323 of the Penal Code, is punishable with imprisonment of up to one year or a fine of up $1,000 or both, ie, actual causing hurt is involved. The third offence of criminal intimidation, section 506 of the Penal Code, is punishable up to two years or with fine orboth. We compare this with the proposed section 33. For the first offence, the person who is involved can be fined between $4,000 and $40,000 or imprisonment of up to three years or both. For second offenders, it is the same fine but imprisonment of up to six years. So clearly, if we make a comparison, we will find the new proposed section 33 will mete out more severe punishment than the other offences that I have mentioned earlier. And this indeed is a welcome move, Sir.

But there are also questions that we need to address ourselves. Are the police better equipped to fight illegal moneylending? The Senior Minister of State alluded to some of these aspects just now. What efforts have been made to address this particular issue? Are there more and better trained officers assigned to deal with this issue? The Senior Minister of State mentionedjust now aboutsetting up a taskforce. What kind of better trainingis provided to these officers? Are there better systems, intelligence and resources allocated to fight illegal moneylending?

Sir, illegal moneylending is not a private transaction between a moneylender and a borrower and we will be naive to think that it is a petty crime of lending or borrowing money not according to the law. Let me explain why.

In June 2005, the police crippled an illegal moneylending syndicate believed to have an estimated pool of 2,000 debtors. This operation of raiding the illegal moneylending syndicate covered 22 locations simultaneously. Thirty people were arrested and I understand that this number is larger than most branches of banks. More than $200,000 worth of loans were given out monthly by this syndicate, generating profits of at least $100,000 per month. The majority of the monetary transactions between the syndicate and the borrowers was done through ATM transfers.In the second raid in November 2005, the police smashed another syndicate. Twelve men were arrested. The operation covered 14 locations and this syndicate was believed to be responsible for more than 40 cases of harassment in the last 12 months. They are believed to have at least 800 debtors, estimated to have more than $300,000 worth of live loans and they are believed to give out $300,000 worth of loans per month, with profits estimated at about $50,000 per month.

While I applaud the successes of the police and the authorities in smashing these syndicates,the figures tell us that illegal moneylending is an organised crime. Organised crimes, Sir, if not checked early, can subvert our economy and the rule of law. Sir, this is not empty talk. We really have real examples in third world countries where illegal moneylending and crimes similar to it actually subvert the country's economy and the rule of law. We have to check it early.

Secondly, Sir, organised crimes at the present timeare usually transnational in nature, bearing in mind our more globalised world. The SeniorMinister of State mentioned just now about higher-tier illegal moneylending which operates from overseas. This is exactly the point that I am trying to say. The question is: what are the other steps that are being taken by the Minister to combat illegal moneylending, bearing in mind that it is an organised crime with likely transnational network support? Is there a comprehensive approach or framework to tackle this issue?

The next question, Sir, is whether the Government should also not look at curbing the demand side. This may be beyond the purview of the MoneylendersAct or even the Ministry of Home Affairs, but then the Ministry has better access to figures and information on why people resort to illegal moneylending. This information can be shared with other agencies and help them design schemes to make illegal moneylending irrelevant.

Sir, I urge everyone to support the fight against illegal moneylending. As a character in Shakespeare said, "neither a borrower nor a lender be". Let us rephrase that, "neither an illegal borrowernor an illegal moneylender be." In supporting this combat against illegal moneylending, we would gather more support if the Government also acts, besides enhancing prosecution and punishment, to reduce the need for illegal moneylenders. The new section 33 clearly makes the offence more serious than the three that I had mentioned earlier. This is a clear and important signal that the Government wishes to treat illegal moneylending harassment very seriously and I therefore again reiterate my support for the Bill.

Dr Tan Boon Wan (Ang Mo Kio): Mr Speaker, Sir, I rise in support of the Bill. I hope the enhanced punishment of fine, imprisonment and caning would dissuade perpetrators and would-be perpetrators of future mischiefs.

I have some sympathy for those who borrowed from illegal moneylenders but they must accept responsibility for their actions. Yes, circumstances could have forced them to resort to illegal moneylenders as a desperate act of last resort, but they know that what they borrowed they have to pay back according to the terms thatwere agreed between them. And if they do not do so, they have consequences to pay. But even then, I agree that there must be limits to what moneylenders can do and the limits should not be excessive, as it is at the moment.

However, I am particularly sorry for those who are harassed when they or their family members have not borrowedmoney but harassed and intimidated by the mere fact that they may just live in the premises. In many instances, the family had innocently bought the flat without knowing that the seller had taken loans from illegal moneylenders. Not only were they inconvenienced by the vandalism and embarrassed by the notices on the walls, many were afraid for their own physical well being. Some of these victims resorted to selling their new flats at a great loss while others moved out to stay with relatives, hoping that time would heal and things would abate.

Sir, I have encountered many cases during my meet-the-people sessions, but let me say that the number of caseshas reduced in recent times. This is probably due, in large part, to the improved economy when there is less need to borrow. If the illegal moneylenders and their hirelings now feel this increasing heat of the law, they have only themselves to blame. In this present day and age, it would not be a problem for them to verify with the people that they are harassing are indeed the people who borrowed from them. Some of the innocent victims have even resorted to putting up notices on common corridors and outside their houses to inform that they are new occupants. However, these notices make no difference. The harassment continues. How on earth domoneylenders expect these innocent people to make good the debts that they do not owe?Moneylenders are intelligent people and this question baffles me.

The ICA can also do more to come down hard on those who misuse addresses of other people. These people pass off addresses of other people as their own and occupants of these addresses fall victims to harassment. Also, there is a trend for companies to refer bad debtors to debt collection agencies, some of whom have resorted to aggressive tactics to collect the debts rather than to turn to the courts. Some of the methods used are also intimidating and amount to harassment. I am not sure if the provisions of this Bill apply to such activities. I would urge the debt collection companies to be circumspectin their collection methods.

Sir, I hope that this Bill will provide the necessary power for our police to go after the perpetrators. On the other hand, if such activities are reduced, then less police time would need to be spent on attending to and investigating these activities.

One other party that will welcome this Bill is the Town Council.Town Councils have, over the years, spent considerable amount of money and time to repair walls, to clean up the mess and to repair other physical damages arising from such activities. And I hope that with this Bill,Town Councils will have to spend less money doing such things as well.

Sir, on this note, I support the Bill and hope that the Bill will be very effective in curbing such activities.

Assoc. Prof. Ho Peng Kee: Sir, I thank both Mr Ahmad Khalis and Dr Tan Boon Wan for supporting this Bill. Indeed, Sir, our hope is that this Bill will achieve its intended effect, which is to reduce the high number of, in particular, harassment cases. We cannot just wish for it to happen. I think what has been said is that everybody must play a part. And I can assure Members that on the part of the police, they will certainly do their part. As I have said in my speech, the police, in fact, have geared up. In June this year, we formed this task force within CID. As Members know, the CID deals with major crimes. So it is a clear signal that with the formation of this task force, comprising officers not just in CID but also pooling resources from the various land divisions, they will have this focused approach which will then target syndicates. We know that it is very difficult to catch the individual runners, and that is why enforcement has to be rigorous and punishment has to be tough. Because we all know on the ground that the runners come, theycarry outtheir very devious act and then they disappear. So with the dedicated task force and with the targeting of syndicates, I should say that over the next six months to a year, maybe a bit more, hopefully, with the syndicates taken out, the action on the ground will get less hot.

Mr Khalis is absolutely correct. Today, this House should send a very strong signal to illegal moneylenders and the runners that we will not condone such actions. And as Dr Tan Boon Wan has said, why should illegal moneylenders harass innocent buyers of HDB flats when it is made known to them that they were not the original borrowers? So Iappreciate Mr Ahmad Khalis' welcoming of these tough punishments.

Mr Khalis is also correct in saying that illegal moneylending activity is not just a simple crime. It is not, thankfully, a transnational crime, in the sense thatthere aregangs actually supporting one another across borders. But like I have said in my speech, illegal moneylending neverthelesstranscends borders because you do have loan sharks who have operated networks and who have been dealt with. They have been convicted, punished or fined. But we know from intelligence that some of them do continue with their activities. And with the very rich database of debtors' addresses, in fact, they can perpetrate their ill intentions from overseas. And that is why, after careful consideration, MHA has decided that we have to take this further step of cancelling the passports of higher tier loan sharks - people with access to such databases, so that they will not perpetrate their activities overseas.

Illegal money lending syndicates have become more organised. They are also using technology. That is why the presumption has been put inthe Act, eg,the payment of the monies. Manytransactions arenow done through ATMs and computer systems. So we have also to watch out for this.

The other point I want to make is that, as I have said in my speech earlier on, it is not just a one angle approach, because illegal moneylending involves the Moneylenders Act. The Moneylenders Act, in fact, is under the purview of the Ministry of Law. So the Ministry of Law will continue to work with the various agencies involved - whether it is MAS, HDB or IRAS - to see whether more measures should be introduced to take a more holistic and more comprehensive approach to tackle this problem. Sir, today's amendments are really just from one angle - a very focused angle - but one, which because this House supports it strongly, to send a very clear signal to perpetrators, andI think this will have the intended effect. We know that the numbers are rising. This is a phenomenon in Singapore which some may say is quite peculiar here but it is something that we cannot tolerate, because all of us on the ground will know that we do have residents coming to see us and sometimes wringing their hands in despair, like what Dr Tan has said, whether more can be done.

Dr Tan says that the Town Councils will welcome this move. Indeed, it is true. Because when walls are defaced, the Town Council has to spend money to putthe walls right. And that is why police, in fact, had been working with the Town Councils to introduce CCTVs on the ground. This has been announced before. This is being rolled out soon. CCTVs are not just to address the problem of illegal moneylenders but crime in the HDB neighbourhoods, and that will include certainly this phenomenon of illegal moneylending. In the meantime, my suggestion to Singaporeans is thatthe act of your walls being painted in a manner that Mr Khalis addresses is really very odious, something that puts you off, and sometimes they put fear in people and also devalues the value of the neighbourhood. And to some people, italso affects their sense of public safety andlevel of comfort. Perhaps neighbours can take a CSSP-type of approach becauseit will never be able to solve the problem. But I think if neighbours are more watchful, more careful andbeing vigilant, eg, if some neigbhours come back at night, they can also be the eyes and ears. And if there is an alert system, eg, handphone, then they could also link up with the nearest Neighbourhood Police Post. Whilst Government will do its part and the communitycan do its part, I think on the ground, the Town Councils and even the residents themselves can also do their part.

As regards identity card offenders, Dr Tan is correct. I think this is also a timely reminder to Singaporeans to take good care of their identity cards, becauseone situationwherepeople suddenly find themselves being harassed is because they have misplaced their identity cards or given their IC to somebody else who then misuses it. So it is not so much for ICA to then come down very hard on situations of illegalmoneylending per se, but those who lose their IC. I think Members know that they are appropriately dealt with and the message is also sent that your IC is an important document. Please take good care of it.

Sir, I think I have addressed all the points. Basically, I am confident that if we work together we cannot solve it entirely but reduce the incidents of illegal moneylending.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Assoc. Prof. Ho Peng Kee].

Bill considered in Committee; reported without amendment; read a Third time and passed.