JOHOR BARU: Loan sharks don’t care whether you need money for your child’s education or to hide an unhealthy habit. Given their exorbitant interest rates, sometimes daily or hourly, they are making tonnes off your situation.
And the friendly person on the phone offering the quick loan just as quickly becomes menacing when the borrower is unable to make the repayments.
And in many cases, borrowers and lenders never even meet as the entire business is conducted via the phone with photographs of identity cards and other documents sent to the Ah Long via WhatsApp and other social media tools, said sources.
A businessman, who did not want to be named, is paying a heavy price after borrowing about RM5,000 to finance his child’s studies. He said his loan has snowballed to about RM30,000 and he is harassed up to 30 or 40 times a day.
“The loan sharks even charge me interest if I ignore or reject the calls,” he said, adding that they have also come to his home looking for him.
He said he became stuck for money during his child’s third year in university when his savings diminished after his business took a hit.
“I borrowed from relatives and friends but it was not enough. I saw a poster near my house and decided to call the loan shark for help.
“The loan shark asked for my details via WhatsApp and said he could lend me up to RM5,000,” he added.
The loan shark then told him to bank in RM1,200 each month into an account as interest payment.
“Everything was going on smoothly until my business took another hit and I could not make the payments. Then the daily harassment started.”
The businessman said he has paid back more than RM30,000 to the loan shark whom he has never set eyes on but his debt is still unpaid.
According to sources, it is difficult to repay these loans – victims usually borrow between RM1,000 and RM10,000 at interest rates of 0.5-1% per day which works up to 15% to 30% monthly.
“If they default, another 5% is added as a late payment penalty.
“And that’s in addition to locking the gates of the victim’s house, leaving threatening notes or splashing red paint on the defaulting borrower’s house,” said the sources.
Another victim, a woman in her 50s, said she borrowed from Ah Long to pay off her gambling debt so her family would not find out about her habit.
“I only borrowed RM2,000 several months ago and was asked to pay RM500 each month as interest,” she said, adding that she made the payments until she lost her job. The woman said the loan shark began harassing her and then referred her to other loan sharks.
“I started taking loans from other loan sharks to cover my earlier loans and now I am stuck with a debt of almost RM20,000 and being harassed by at least eight loan sharks.
“I get daily calls – it is like a living nightmare. I regret ever borrowing from them. I am unable to tell my family as it is embarrassing,” she said. Asked how she was planning to repay her loans, she replied that for now, she was just trying to avoid the loan sharks as much as possible.
State police caught two major Ah Long gangs when they picked up six men in a series of raids over the past few days.
They recovered a huge collection of documents detailing the monies lent out, thousands of stickers, posters and banners and more than a dozen gold chains from the suspects.
All the suspects, in their 20s to 40s, have been remanded to assist in investigations. They were arrested in raids in Masai, Bandar Datuk Onn and Taman University in Skudai.
It is learnt that some of the Ah Long had valid money-lending licences but abused the conditions of the licence.
“Under Bank Negara rules, money-lending outlets can only charge a maximum of 18% per annum and there should be proper documents and agreements between the lender and the borrower,” said sources.
State commercial crime investigation department chief Asst Comm Mah Khye Beng, when contacted, said several Ah Long have been arrested and that investigations were ongoing.
He appealed to the public to refrain from borrowing from loan sharks and urged those with information to contact the police hotline, 07-2212999.
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