Times have changed, and even Ah Longs (loan sharks) have abandoned their traditional methods of advertising, such as passing or pasting flyers and posters.
According to a report by Kosmo, loan sharks have discovered new methods to lure younger Malaysians into borrowing money — to develop mobile applications to attract millennials and Gen-Zs.
It was said that this new method that utilises the latest technology is more effective and systematic for loan sharks to trap their prey when compared to traditional methods.
These syndicates would also use paid advertising on social media platforms like YouTube and Facebook to reach a wider audience and strengthen their ability to attract and retain customers who are interested in applying for loans.
According to the Islamic Consumers Association of Malaysia (PPIM) working secretary, Zharif Johor, he said that about 49 illegal money loan applications had been developed over the past two years.
Loans started as low as RM300 but victims ended up paying RM20,000
Their modus operandi begins with spreading scams with WhatsApp in hope that people would download them and end up borrowing money from shady lenders.
“The loan offered is as low as RM300 and the borrower will get RM150 of that amount and will have to repay it within a week or two,” he said.
He added that they first received reports of such syndicates in November 2019, but the number is growing higher and higher, especially after many people lost their jobs as a result of the Movement Control Order (MCO).
“Advertisements for apps on social media platforms like Facebook and YouTube are beginning to pique users’ interest. These advertisements popped out of nowhere as if they could read the user’s mind,” he said.
Zharif then shared that these loan sharks would initially charge an interest of 30% on the loan about, but later blackmail the victim by raising the interest to as much as 800% for a single day of late payment.
To make things worse, these loans come with compounding interest and they continue to receive offers via new messaging channels.