Greetings & Salutations,
Let me wish everyone a Happy New Year 2013. It seems that the hype about the world ending on 21.12.2012 is just another “April Fools” joke. So people, start paying your bills as usual. As for those affected by the floods throughout the nation, especially on the east coast, you got my sympathy. I urge the loving people of Malaysia to lend them a hand. It is saddening to see that families forced to leave their home and having their belongings damaged or even stolen.
|Homes affected by floods in Terengganu.
|Flood victim leaving their homes in Setiu, Terengganu.
ALL THE INFORMATION DISCLOSED HERE ARE NOT MEANT TO SLANDER ANYONE OR TARNISH THEIR IMAGE, BUT I’M JUST STATING THE FACTS AS IT IS AND THE IMPROPER CONDUCT OF THOSE IN IT. SHOULD ANY OF THE PARTIES CONCERNED HAVE ANY OBJECTION ON MY WRITING, FEEL FREE TO HAVE YOUR SAY IN THE COMMENT SECTION BELOW. I WILL NOT REMOVE ANY COMMENT UNLESS IT IS A SPAM (I.E. PRODUCT ADVERTISING, COMMERCIALIZATION). I WROTE TO GET THE AUTHORITIES ATTENTION AND TO GET THEM TO ACT ACCORDINGLY. NOTHING MORE, NOTHING LESS.
Before the main course is served, let’s have some appetizer. This articles is general in nature and it is about the new age shark and has nothing to do with my next main exposé. For decades, many Malaysian have become victims of loan shark or “Ah Long”. Although it seems that the authorities are curbing their activities, but these predators continue to flourish in our waters. This is because they are not just an ordinary crooks but they are well organized and now have become institutionalized and could be backed by some of the most powerful individuals in the public sector, politicians and even legal financial institution.
The new age shark no longer operates like a common street thug, wearing washout jeans and sleeveless shirt to show off their dragon tattoo on their muscular biceps. They now have registered entity, wear Irish linen slacks and long sleeved collared shirt with matching polka dot neck tie. The old Ah Longs have evolved into something else, into a white collar loan shark, into a mafia. They are more organized and business minded yet still maintains their blood sucking traits.
|A trailer screenshot of Kepong Gangster. Ol school thugs.
Their M.O. is to cooperate with legal financial institution a.k.a. the Banks. Having one thing in common, to make as much profit as possible in the least amount of time, both the loan shark and the Banks formed a strategic alliance. The Axis of Evil. The Banks will provide the legal front, and the loan shark will lure the unsuspecting prey. The loan shark will act as a financial consultant, and they need not to apply for any license from Bank Negara as their job is mere consulting to the Banks existing customers.
The loan shark will set a trap by luring the potential prey and briefly introduce their services to “assist” the victim. The sharks will offer to “assist” the Bank customer to cash out their credit card balance with half the interest as normally charged by the Bank. A standard interest rate charged by banks on credit balance is 18% per annum or 1.5% per month. That will mean that these new age shark could offer an interest rate as low as 9% per annum.
To make it more tempting, the repayment tenure can be as long as 36 months. This is where it gets really interesting, since you are cashing out your credit card balance; you actually owe the Banks and not the new improved Ah Longs. An example, if you are cashing RM 10,000.00 out from your credit card available balance, you will be paying RM 352.77 per month for 36 month, with an interest rate of 9% per annum for 3 years to the Banks.
Everything seems hunky-dory at this point right? NO. This is what actually transpires. The victim agreeing to this deals, will be receiving the cash minus the interest rate. If the interest rate is agreed on 9% per annum, and the agreed tenure is 36 months or 3 years, the total interest rate will be 27% for the whole 3 years. So if you are cashing RM 10,000.00 out from your credit card available balance, you will only be getting RM 7,300.00 and you will be paying RM 202.77 per month to the Banks. The Banks will credit RM 7,300.00 to the victims account and split the interest rate takings with the Ah Longs.
The Banks and the Ah Longs are taking their profit upfront, reducing their risk on non-performing loans (or at least on the interest part). Although this could be legal in the eye of the Laws, but it would be unethical. This sort of deals should be scrutinized by Bank Negara Malaysia.
Another implications from this deals, should the victims fails to pay on time the amount due to him or her each month to the Banks, they will again be charged another 1.5% per month. Thus making it much harder for these victims to settle their new debt.
I would advise everyone to be extra vigilant and not fall prey to the new age loan shark. No matter how hard it is managing your financial situation, think really hard before taking the “easy” way out. What seems like a brisk walk through the park might get you into more trouble than you anticipated. I also urged the authority i.e. Bank Negara Malaysia to investigate this matter. Query all financial institution whether are they making any deal with external party. Take stern actions against these financial institution for collaborating with the Ah Longs.
|Burp.....That was delicious.
Signing out for now.