Peninsula loan sharks active in Sabah

KOTA KINABALU - Loan sharks from Peninsular Malaysia are actively operating in Sabah, preying on locals and intimidating them into paying exorbitant interests, according to Kuala Lumpur Consumers Safety Association president Samsudin Mohamad Fauzi.

He said yesterday that Ah Long (loan sharks) from the peninsula had expanded their network here by using legitimate money lending licences to cover their activities.

Samsudin said a survey conducted by the Association over the week found that several licensed money lenders were conducting loan-sharking operations here using third party agents to do deals and collect high interests from debtors on their behalf.

He said these workers who were also brought in from the peninsula, acted like gangsters and intimidated their debtors while telling their victims that they were well connected with the local authorities.

As a result, he said the victims were often too afraid to even seek help or lodge reports with the relevant authorities.

“Throughout the six days I’m here in Kota Kinabalu, I’ve learned that the loan shark problem here is no different from that in the peninsula where the victims are too intimidated by Ah Long,” he told reporters here yesterday.

He said these operators intimidated their victims including by sending gangsters to follow them around and to collect debts at their homes and workplaces.

“They usually appoint agents to conduct deals on their behalf, and these agents will give blank documents for the clients to sign at the roadside or restaurants, keep the names of their companies from the clients and of course charge various fees that they claim are needed for processing the loans.

“Our study also found that unscrupulous licensed money lenders often prey on those that are desperate for loan and would agree to the conditions for the service.

“This includes signing blank documents and the amount the victims sign for would differ from the amount that they actually get, and they will not be given the copy of the agreement letter or receipt of any payment.

“They would also be required to give their ATM cards and savings account books, and the money lender will increase the amount of the loan every time the debtor misses a payment, and producing a new loan agreement by using the blank documents they had signed earlier,” he said.

Samsudin however said the association did not have statistics on the number of victims or cases involving Ah Long from the peninsula in Sabah.

He urged anyone who had been victimised by either licensed or illegal money lenders to come forward as information they provide could be vital in helping the authorities to curb loan-sharking activities.

For cases involving licensed operators, he said the victims could lodge their report directly to the Ministry of Finance which oversees the operation of money lenders.

“If an operator is found to have breached the rules and regulations stipulated in the Money Lender Act 1951, the loan agreement would automatically be null and void and the debtors would not need pay the loans.

“This is because the loan agreement that is not done according to the law is considered non-existent and technically, so is the loan involved and the creditor cannot do anything,” he said.

He added that the debtors could sue the money lender if the latter went to his/her home or workplace to shame him/her in regard to the loan agreement between them, stressing that debtors must know and practise their rights.