Loan sharks are now preying on people who are close to an age at which they can either partially or fully withdraw their EPF savings.
According to The Star, the slick slogan “Borrow first, pay later” had been advertised by these moneylenders to the public to get them to take out loans with them. Some even claim that they are licensed credit agencies under the Housing and Local Government Ministry.
It was reported that these money lenders are targeting people who are 49 years old, as they will be eligible to withdraw money from their second EPF account at 50. Some even go after those aged 53 and 54 as they can withdraw all their savings when they reach 55.
“We will give full loan amount and payment will be on a lump sum basis when you are allowed to withdraw your EPF, meaning you don’t have to pay every month,” one of the moneylenders was quoted as saying.
Meanwhile, the loan’s interest rate is set at 5% a month, which is equivalent to a whooping 60% a year and it could even be higher if compounded. This has also exceed the rate allowed under the Money Lenders Act 1951, which is not exceeding 12% a year for secured loans and 18% a year for unsecured loans.
“We don’t have any payment schedule so we depend on your documentation. Once you submit it, we will help you process and we should be able to get a response from our headquarters within an hour,” said the woman, a Malaysian, on the phone,” the moneylender continues saying.
“Our headquarters will decide on the amount approved and repayment, and upon your agreement, we will help you to proceed with the loan.”
The money lender also asked for a copy of our MyKad and EPF statement for review purposes, as well as a copy of a utility bill and child’s identity card to begin the process.
After submitting the documents, the moneylender said an agreement would be signed online, and they would do a one-minute video call for verification.
Nonetheless, it is a common tactic illegal for moneylenders to record the call and then edit the video to include nude photos, an image of the borrower’s identity card and agonising messages to blackmail their victims by threatening to share it publicly if they failed to repay their loan.
Here’s some advice to never resort to loan sharks to resolve your financial issues as they might be a further issue for you later on.