A foreign domestic worker who wished to stay anonymous told a Singapore newspaper that she and many others had received an SMS promotional offer from a remittance company, which said the company could “lend” them S$2,000, an amount exceeding the legal limit.
The worker, whose nationality was not mentioned, told the Shin Min Daily News that she recently received the SMS allegedly sent by Toast Me, a company which she had previously used to get a S$1,000 loan (US$739) in July 2018, which she settled over six months.
Repaying the loan cost her a total of S$1,562 (US$1,154), and in her opinion, the company charged higher than many other companies. Not wanting to borrow more money, but out of curiosity, she clicked on the hyperlink provided by the company, which took her to a name list of customers who had taken out loans from the remittance outlet.
According to the Moneylenders Act, a foreigner who earns less than S$10,000 a year is only permitted to borrow up to S$1,500, and the monthly interest rate is capped at 4%. The remittance company replied to a media inquiry, saying they were not offering loan applications but cash advance services, and they denied charging customers an interest rate of 15%.
The spokesperson from the Monetary Authority of Singapore said Toast Me was a licensed firm under the Money-changing and Remittance Businesses Act and their business is limited to only the two activities.
With the updated Payment Services Act to come into force later this year, it is expected that remittance companies will be barred from offering pseudo-moneylending services like cash advances.