Beware of ‘borrow first, pay later’

PETALING JAYA: We said we wanted to borrow RM3,000 since we can’t access our Employees Provident Fund (EPF) savings yet, and we need the money now.

No problem, said the woman. Just pay us back RM6,390.

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This is the latest scheme from loan sharks that preys on people who are close to an age at which they can either partially or fully withdraw their EPF savings.

“Borrow first, pay later” is the slick slogan used by these “community” moneylenders, some of whom claim they are licensed credit agencies under the Housing and Local Government Ministry.

Their targets are people who are 49 years old, as they will be eligible to withdraw money from their second EPF account at 50.

They are also going after those aged 53 and 54 – people who will be able to withdraw all their savings when they reach 55.

Advertisements, videos and even testimonials from previous “customers” promoting such services are all over social media.

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“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,” said one of the moneylenders when we responded to an ad, posing as an interested customer.

The loan’s interest rate is set at 5% a month – which works out to a whopping 60% a year, far higher than 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.

“Our headquarters will decide on the amount approved and repayment, and upon your agreement, we will help you to proceed (with the loan).”

We were asked to provide 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.

The moneylender claimed that the agreement would be signed online, and she would do a one-minute video call for verification.

This is a common method adopted by illegal moneylenders who record the call and then later 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.

The moneylender that we spoke to also shared pictures of her office and information about the company’s operating hours to further persuade us and justify its legitimacy.

A few other moneylenders that we approached were adamant about getting a copy of our MyKad and EPF statement before giving any further details.

“Normally, for a personal loan, we look at your payslip but for this scheme, we will look at your EPF savings,” said a moneylender in a video post on Facebook, going on to add that those aged 49 must have a minimum of RM30,000 in their second account and those aged 53 and 54 must have that amount in their account one and two to be considered for a loan.