The Government will impose additional licensing conditions on moneylenders tomorrow to better protect the public from malpractices.
Deputy Secretary for Financial Services & the Treasury Patrick Ho said today the new conditions will boost enforcement of the statutory ban on separate fee charging of borrowers by moneylenders and their associates.
The move addresses increasing public concern that deceptive tactics are being used by fraudsters, who claim to be moneylending intermediaries, to induce borrowers to engage them for arranging loans with moneylenders.
In the process, very high fees get charged under different pretexts.
The new rules stipulate that moneylenders must not accept a loan application referred by an intermediary if they charge any fees on the borrower, are not its appointee listed on the Register of Money Lenders or refuse to provide a copy of the intermediary agreement to the borrower.
The public are reminded to verify the identity and appointment status of any intermediary by checking the Register of Money Lenders and ascertain that there is no provision for fee charging or any guarantee money before signing an intermediary agreement.
All moneylenders will also be required to include the risk-warning message - "Warning: You have to repay your loans. Don't pay any intermediaries." - in all moneylending advertisements.
The Registrar of Money Lenders has engaged the moneylending sector to discuss the additional licensing conditions and issued guidelines on their operation.
