IF a lawyer is present, the deal should be above board. Right? Wrong.
Three years ago, retired civil servant Z. Othman readily signed a loan agreement, blank Housing Board sale/purchase forms and even blank sheets of paper because it was in the presence of a lawyer.
She promised to pay interest at the rate of more than 85%. Under the Moneylenders Act, the maximum interest is 12% a year for a secured loan and 18% a year for an unsecured loan. Only much later did Z find out that Goh, the man offering her the loan, was an unlicensed moneylender who used lawyers and bank officers in his scams.
The 57-year-old woman had borrowed S$28,000 (RM64,975) from Goh, signing a loan agreement for S$52,000 (RM120,669) to be repaid a year later.
I signed the papers in front of his lawyer so I thought he was a licensed moneylender and everything was done according to the law, she told The Straits Times.
While it is not illegal to lend money, only a licensed moneylender can charge interest.
Lawyers said unlicensed moneylenders often include the interest in the loan quantum to make it look like an interest-free loan.
They also feel that it was unbecoming for Gohs lawyer to be present at such transactions.
A veteran lawyer, who asked not to be named, said: If the lawyers were aware that it was illegal, then they could be charged with abetment.
Z said Gohs lawyer did not sign as a witness to the loan agreement, but her presence made everything appear legal.
When contacted, Goh declined comment and the lawyer denied any wrongdoing. She insisted that her firm only did conveyancing work and said that she was not certain whether she knew Goh.
In an e-mail reply, the Law Society said a lawyer should not witness the signing of a blank document. The Straits Times/ANN
We're sorry, this article is unavailable at the moment. If you wish to read this article, kindly contact our Customer Service team at 1-300-88-7827. Thank you for your patience - we're bringing you a new and improved experience soon!