Modern Day Usury: Loansharking

From a social standpoint, loansharking is a widespread form of usury which attacks the class bordering financial stability and impoverishment. Loan sharks are unlicensed money lenders (UML) of an extortionistic nature. This socially destructive force is a predatory menace to the most vulnerable people in society — from preventing a young man to attain an otherwise possible financial growth to collateral damage resulting from harassment performed unto his family and neighbours. Increasing frequencies of harassment and the public fear they generate have created considerable interest in devising strategies for crime prevention and control. Loansharking techniques are evolving and will continue to pose a real threat to citizens’ safety, unless and until a sound policing system of crime prevention and cash credit system is set up alongside legal sanctions against UML. This article situates the problem of loansharking in Singapore, examines existing penalties and policing strategies for combating the issue and proposes further structural enhancements to existing measures to curb the problem.

It is imperative to understand the loansharking context in Singapore. Statistics have shown a steady increase in the number of loansharking incidents in Singapore from the year 2004. Although the year 2007 saw a slight dip in the number of cases, loansharking and harassment activities have risen consistently, with the highest yet figure of 18,645 reported cases last year. In addition, loansharks have evolved into organized criminal syndicates with multiple layers of hierarchy such that penetration through the layers to nab the ringleader at the core of this illegitimate entrepreneurialism proves to be challenging. Those that partake in harassment activities and debt collection are “runners”, some of whom are debtors pressured into becoming runners. They belong to the lower rungs of the organisation and most would not tell on the syndicate for fear of reprisals to their family. Their harassment tactics include padlocking the household gate with a chain and splashing urine, blood or paint on the front door. Of late, runners have even extended their boundaries of vandalism to stigmatising the borrower’s neighbours’ homes intended to shame the borrower into repaying his debt. The problem is intensified by the economic reciprocal relationship of demand and supply. That loansharks thrive proves there is a demand for their illicit services. Indeed, it is a disgrace upon us in our civilized communities that we tolerate a group of loan sharks who extort as much as 1000% a year from the poor, who are driven to the necessity now and again of contracting for small loans. That tough measures are needed to cripple the loanshark scourge before they cripple the prevailing peace of society requires no further explanation.

Current legal measures and policing strategies in Singapore largely follow classical criminological philosophies, which assume a social contract undertaken by people who mutually refrain from harming others through rational choice. Thus, the loanshark is assumed to act out of free will and self-interest when he violates the social contract. Punishment tactics is guided by the denunciation model, which is a hybrid of utilitarianism and retribution. Utilitarian punishments befitting the crime are meted out as deterrents to would-be criminals who will destroy the peace of society. Where current measures prove ineffective as deterrents, stronger measures are proposed. Under the recently enhanced Moneylenders Act, there will be mandatory caning for first-time harassers in addition to existing penalty of a fine up to $40,000 and a jail term not exceeding three years (http://statutes.agc.gov.sg). Mandatory forms of punishment extends from retributive theory, and in this case, views caning as a punishment for loansharks that abuse their free will and consciously inflict harm on others. The police have also invoked the Criminal Law (Temporary Provisions) Act to detain perpetrators in instances where witnesses are hesitant to stand court for fear of reprisal(http://statutes.agc.gov.sg). Critics may question the morality behind the punitive measure, but it is certainly considered safe practice for traumatised citizens who have endured abuse and threats by the same perpetrators.

In fashioning punishments such as those mentioned above, judges need to consider extenuating circumstances as advocated by the due process model of criminal justice, such as crimes fostered by mental instability or coercion resulting from socioeconomic class which in turn contradicts the assumption of free will. Such offenders need to be rehabilitated appropriately to prevent miscarriages of justice. For example, a stigmatized ex-convict, Rezal, was faced with financial difficulties created by prolonged joblessness and two school-going children, was coerced into becoming a runner . Restorative measures for people belonging to this demographic group must be considered by the state. The recent adoption of the new Criminal Procedure Code which issues community-based sentencing options for crimes motivated by mental illness or dysfunctional family circumstances appears to be a step towards restorative punishment. This has led to reformative training instead of the initial four-year imprisonment for 16-year-old loanshark runner, Nur Azilah Ithnin, who was driven to the crime in late 2009 due to desperation arising from poverty and a dysfunctional family. One can argue that impoverished youths might view reformative training as a ‘softer’ form of punishment and thus question its deterrence value. One must, however, bear in mind that it is as important for the young offender, a victim of circumstances, to reintegrate into society without potential recidivism as it is important to deter crime. Advocates of Right Realism may dismiss socio-economic circumstances as causes of criminality. However, as long as hosts of people are living upon small salaries bordering competency, a slight disturbance in the normal course of affairs, such as prolonged illness necessitating hospital and medical care, the necessity for making small loans even for the purpose of meeting household expenses temporarily, will exist. It is all very well for those who are firmly situated from the financial point of view to say that every person must live within his income. Inevitably, situations arise in which it is utterly impossible to do so from week to week.

Perhaps the most worrying trend of loanshark syndicates is that of youth involvement in loansharking, either as runners or debtors. One in four arrested for the crime last year was a youth (Singapore Police Force, 2009). Besides Nur Azilah Ithnin’s case, in April 2009, a thirteen-year-old boy hooked on internet soccer betting was reported to have amassed $30,000 in loanshark debt. As a reactive rehabilitative strategy, he was referred to counseling for gambling addiction. While gambling was the initiating cause for this crime thereby warranting rehabilitation, the borrowing problem needs to be addressed at the tertiary level of preventing potential recidivism. Delinquent acts are often believed to be committed by working class youths, particularly those facing school failure having been denied legitimate channels to achieving their goals, drifting into the trade. In the case of the thirteen-year-old boy, his actions were not borne out of status frustration, as both parents are white-collar workers, but of neglect resulting from parents’ long working hours. That Singapore comprises of a largely middle-class population and economic competition necessitating long working hours suffice to say that this is probably not an isolated case. Hence, at the primary level of crime prevention to prevent youth involvement in loansharking, school constables under the SPF’s Honorary Volunteer Special Constabulary School scheme should provide educational talks on the dangers of loansharking. In considering deterrence measures for impressionistic juvenile delinquents vulnerable to external influences, society must also avoid negative labelling. This is sometimes subconsciously materialized by the media. That the name of juvenile delinquent runner, Nur Azilah Ithnin, was published in the press revealed the insensitivity of the press to journalistic repercussions. Instead of drifting out of delinquency as they near adulthood, labelling may reinforce youths’ negative self-concept and commit secondary deviance.

Besides these crime prevention measures and the issues entrenched in them, other policing strategies put in place by the state to curb loansharking will be reviewed and structural enhancements proposed, the first of which is preventive strategies at the primary level by the police, who bear the primary burden for controlling crime . Standard strategies involve stable geographic assignment of officers to decentralized Neighbourhood Police Posts (NPP) to improve familiarity with the estate, its problems and residents. This is aimed at projecting a sense of omnipresence of the police in the minds of the syndicates and reassurance of safety for residents. Dr. Sylvia Lim of the Workers Party noted at a parliamentary meeting that there has been a growing public perception in Singapore that police presence has fallen from the heights of the 1990s when the NPP then served longer hours, thereby implying the need for increased surveillance. However, much research conducted in the U.S have proven preventive policing by patrol is known to be costly, intrusive and generally an ineffective allocation of resources, especially with the already stretched SPF being reallocated to man new units handling casino-related matters since the operation of the casinos. An alternative non-intrusive approach is to install CCTVs in lifts and at staircase entrances, which some anti-loanshark watch groups in Serangoon, Redhill, Canberra and Bukit Merah estates are already doing (Grassroots fight back with anti-loan shark programme, 15 March 2010, paras 2-7). A further enhancement to prevent the “big-brother” syndrome, CCTVs should only be activated upon the first sighting of vandalism since repeat visits by runners are to be expected. However, the most effective form of surveillance is perhaps by community crime prevention, of which the central premise is that by exerting informal surveillance and social control over their neighbourhoods, residents can affect the extent to which opportunities for harassment exist. Opportunistic loanshark runners avoid areas where they feel conspicuous and think their presence might be challenged. Considering the open structure of HDB design with residents already hanging out in such close proximity at gardens, void decks, playgrounds and coffeeshops, what better way of neighbourhood surveillance is there than to engage the residents? Existing anti-loanshark watch groups are currently alerted by the NPP of a harassment case within 24-hours of harassment occurrence, after which Residents’ Committee(RC) members will notify residents of the affected and neighbouring blocks to watch out for repeat attacks and to offer information which could help in the conviction of offenders. By doing so, residents act as informer law enforcers, reporting on crimes of which they have been victims, suspicious activities and crimes-in-progress that they have observed. The Redhill and Bukit Merah RC members have also been roped in to join police officers on patrol to sieve out suspicious characters, thereby improving police-community relations, police awareness of residents’ concerns, residents’ awareness of police limitations and consequently, increased responsibility on residents’ part for crime prevention. In this way, the SPF has extended beyond their task of policing to fulfill the social service role of establishing rapport with the community as residents could be ready witnesses to criminalizing loansharking acts. To further enhance community crime prevention, the authorities should perhaps model after the Hartford Crime Prevention Project in the U.S, which has proven that increased human activity enhanced by mixed land uses – mixture of commercial and residential uses, results in informal surveillance by citizens which protects public and private spaces simultaneously. Thus, the SPF can collaborate with town councils to ensure geographical hotspots identified by the anti-UML task force has a constant buzz of activities brought about by the construction of shopping malls and social activities conducted by community clubs and RCs. Once a sense of security prevails over the neighbourhood, residents inevitably exercise control over suspicious-looking outsiders present in the area.

Besides the community approach, the SPF has adopted the intelligence-led problem-oriented approach of assigning an anti-UML task force in 2005 to investigate and conduct ambush operations on syndicates. It bore fruit a year later in 2006 when the number of arrests for UML offences increased by 11% and the number of detainees under the CL(TP) Act increased by 63% (Singapore Police Force, 2006). This centralised operation is timely considering the growing audacity of loansharks and that casino operations are expected to create collateral damage to society, of which loansharking is the prime concern. Further suggestions to optimising the scope of this specialist team include investigating ways to deter syndicates from utilising technology for their crime, transnational crimes due to the foreseeable increase in foreign clients to the casinos and juvenile delinquents from being lured into the trade. In addition, they should identify geographical hotspots in the city to direct resources to. Netizens of local forums who deem this as an operational over-reaction may instead take a cue from islamic terrorists who, prior to the 911 incident, were thought to be working-class adults incapable of technological manipulation.

In a multi-agency approach to tackling loansharking, the SPF has collaborated with Monetary Authority of Singapore and Association of Banks in Singapore to advance procedures and refine policies to curb banking exploitation by syndicates. This has culminated in the enhancement of existing penalties in the Moneylenders Act, which includes freezing the assets of culprits who have utilised technology and electronic banking facilities in a bid to avoid detection and arrest or operated from offshore online banking facilities to sustain their businesses, using connectivity made available through social networking sites like Facebook and Twitter to operate under the shroud of anonymity).

In yet another multi-agency approach, the SPF has collaborated with HDB to identify loansharks who exploit a legal loophole in which they file a caveat on a home buyer’s flat purchase that entitles them to the proceeds upon resale. Some borrowers have also furnished loansharks with outdated or false addresses, resulting in unsuspecting new occupants becoming innocent victims of harassment and live in the shadows of violence sale. Considering HDB estate’s compact dwellings and people residing in close proximity, loansharks prey on the vulnerability of residents susceptible to arbitrary harassment gangsterism. and a jail term of up to a year for borrowers who offer outdated or false address to loansharks. Flat owners who sublet their flats are also required to provide HDB with details of sub-letting agreement and renewed tenancy or termination. While such efforts to protect the safety of new occupants are commended, one foreseeable issue that would deter homeowners from diligently doing so is the tediousness of doing so for short term tenancy. Perhaps an online system of tenancy updating can be set up. Penalties for failure to do so should be made clear, as with system of tracking. Such preventive tactics will deter otherwise law-abiding citizens like real estate agents from working with loansharks to devise extortionistic means against mis-informed cash-strapped home owners.

On the parliamentary debate as to whether borrowers should be penalised for illegal loans, extensive investigative work should distinguish between those who borrow for sustenance purposes and those who borrow to fuel habits of drug-taking or gambling. In the case of the former, the SPF should not assume they are aware of their legal rights or legal avenues they could consult during economically troubling times. A public education programme could be drawn up by the RC to inform residents of credit unions or legal moneylenders in Singapore. In addition, Singapore can model after the U.K in assigning hotline numbers which provide free advice on alternative recourse for borrowers or those in desperate financial predicaments. In the case of Rezal, a victim of circumstances, simply punishing him would be criminalising him without providing real choices, whilst generating fear in borrowers who will not report the loansharks for fear of being criminalised themselves. The Ministry of Home Affairs must be careful not to unwittingly create such favourable conditions for loansharks to thrive. The government has consistently explained the unfeasibility of unemployment insurance in a highly-industrialised economy like Singapore: that it may encourage exploitative motives. Well then, how else can the government ease micro-level economic stress in unprecedented situations like sudden retrenchment than to allow withdrawal of one’s Central Provident Fund to tide him over the downturn? On the other end of the spectrum, he who borrows to fuel a vice should receive due punishment and reformative measures for consciously providing a demand for loansharks to feed on and indirectly disrupting social stability.

Whilst crime prevention techniques abound, criminology theorists concur that crime will never be fully eradicated. In particular, critical criminologists posit that crime is formulated according to the ruling class who have the power to translate their interests into public policy. Critics of legal measures against loansharking question why there are no usury laws in commerce where “junk bonds” and other loans of highly extortionistic nature thrive. This has led economists to argue that the primary means for achieving success is extortion. Indeed, the adage “he who controls debt, controls the world” holds some truth within the capitalism model wherein opportunities are unequally distributed to social groups. This must be recognized and conditions must be made favourable for persons who find themselves under the necessity of borrowing in such circumstances. Only then will justice be maximised in the existing capitalist system.

In conclusion, loansharking has swelled to preponderous proportions, generating millions in revenue whilst victimising people and disrupting community peace. As syndicates evolve, crime prevention tactics need to be refined and strengthened. Loansharking, traditionally linked with gambling, poses an increased threat along with the operation of the casinos. Syndicates need to be closely monitored before more complex organised crime take root here which deteriorates the quality of life. People should instead be steered toward legitimate online loans in the UK instead of feeding the sharks even more.

How to Embrace Your Student Loan Debt

Student loan debt seems to the rule rather than the exception. My $15,000 debt has been around quite a long time and will probably take me about 10 more years to pay off. There have been periods where I have paid regularly but more periods where I have requested deferments. The government makes it very easy to defer and they give you quite a bit of latitude when it comes to making payments on the debt. I have never been in default and never will be barring a catastrophic life occurrence.

I do not resent my debt and it will one day be a memory. Without student loans, I would not have been able to get the wonderful education I received from UCLA. My college years were wonderful – some of the best years of my life. The collegial environment, the rigorous academic requirements, the diverse group of people I came across and forged friendships with all contributed to an enriching educational experience. Therefore, yes the student loans were definitely worth it and they contributed to making me the person I am today.

When I lost everything, I still had my education. I was the first person in my immediate family to go to college and received a write up in the local paper when I graduated. My loans were spent strictly on my college education. I was responsible for the cost of my education and used the loans for that purpose along with working two to three part time jobs during the school year and lining up a job for the summer. I have benefited greatly from my education. Not necessarily financially but it has instilled confidence and helped vanquish some deep emotional demons. I have no regrets. When I was going through a difficult period, right after graduation, my cousin told me to always remember that no one will ever be able to take my education away from me and those words will always remain with me.

Being a single mother and working for a non-profit makes it difficult to pay the loan back on a regular basis. Hindsight is 20/20 and there are financial decisions I wish I could have changed and instead focused on reducing and eliminating my student loan debt. I may not be making a six-figure income but what my student loan debt represents to me is invaluable.