PETALING JAYA: Beware of the wolf in sheep’s clothing, warn consumer associations and the Employee Provident Fund (EPF).
In a statement on its website (bit.ly/epf_warning), the federal retirement planning fund warns contributors against the latest sophisticated schemes offered by loan sharks:
“EPF has identified advertisements on social media offering personal loans using EPF money as collateral. These offers allow third parties to profit from the savings of contributors.
“Members are advised to be vigilant and avoid being misled by offers that will affect their EPF savings.”
Illegal pawnshops are adept at changing their modus operandi to appear legitimate, Muslim Consumers Association Malaysia Secretary General Datuk Dr Ma’amor Osman pointed out, adding that they only reveal their true colors when it’s time to collect the payment.
“There’s this saying, ‘The butterfly forgets the trap, but the trap doesn’t forget the butterfly.’
“These illegal loan sharks are changing their modus operandi so that the moth doesn’t even realize it’s trapped, and they’re getting more and more sophisticated at tricking their victims.
“But they still use force to collect their payment.
“In those days they used to hide behind credit service companies so people would consider them genuine since they are registered with the Department of Housing and Local Government, but poor oversight allows them to operate at- beyond the law,” he said, adding that some have escalated their interest up to 1,000%.
Ma’amor thinks the government should review the provisions of licensed credit service companies that may prevent members of the public from borrowing money through proper channels.
“We have Tekun Nasional, Amanah Ikhtiar Malaysia but why are people still going to these illegal loan sharks?” Ma’amor said, referring to government financial services agencies that provide loans.
“The system failed or is it not user-friendly? Small traders may not be able to provide documents, but they have the ability to repay, so we have to help them, otherwise they will enjoy it for a long time” , did he declare.
He added that the government should also raise public awareness of financial scams, particularly the danger of allowing bank accounts to be used as mule accounts for money laundering. This trick allows scammers to avoid capture while the mule account holder pays the price.
Meanwhile, Kuala Lumpur Consumer Safety Association Chairman Samsuddin Mohamad Fauzi said the Communications and Multimedia Commission should take immediate action against those promoting illegal money lending services on social networks.
“They shouldn’t wait for the police to come to them; rather, they should take proactive steps to remove accounts promoting illegal money lending services.
“Prevention is always better than cure,” he said.
Samsuddin, who has helped long victims in the past, said most of those he helped did not know they were borrowing from illegal moneylenders.
“They signed an agreement, but they haven’t received a copy of the agreement. It won’t happen with legitimate lenders,” he said.