The Malaysian International Humanitarian Organisation (MHO) has issued a stern warning to Malaysians: do not pay loan sharks (Ah Longs - colloquial term for an illegal money lender) - not even a single sen. What may appear as a debt settlement is, in reality, participation in an illegal activity that fuels a vicious fraud cycle and could land victims in deeper legal trouble.
According to MHO secretary-general Datuk Hishamuddin Hashim, the misconception that victims should “settle the principal amount” to clear their names is dangerously misguided. In most cases, the “principal” itself is fictitious. For instance, an individual might borrow RM1,000 but only receive RM800 after hidden deductions. When they fail to repay, another party steps in, offering a “new loan” to cover the old one. If they default again, yet another party emerges - all claiming to be different lenders.
However, Hishamuddin revealed the shocking truth - these so-called lenders are not separate entities but part of the same criminal syndicate. The illusion of multiple debts is created through a method called “overlapping”, where money circulates within the group to fabricate a chain of false obligations. “When you add up the so-called ‘principal’, it looks like 10 different loans, but in reality, the victim only ever received money from the first,” he explained.
Hishamuddin emphasised that these are not legitimate loans, but a well-organised fraud scheme designed to trap victims into endless repayment. More importantly, he warned that paying loan sharks is a crime under Section 5(2) of the Moneylenders Act, as these operators are unlicensed and illegal.
Worse still, making payments to such syndicates could expose victims to prosecution under Section 4(1)B of the Anti-Money Laundering Act, since those payments involve proceeds from criminal activities. “By continuing to pay, victims unintentionally become part of the money-laundering chain,” Hishamuddin warned.
He added that no legitimate NGO or enforcement agency should advise victims to pay loan sharks. Doing so could constitute abetment under the law, making those parties legally accountable as well.
Hishamuddin urged victims instead to lodge police reports and seek help through proper legal channels. “The more you pay, the deeper the trap,” he said. “You’re not clearing your debt - you’re feeding a crime.”
In short, the message is clear: don’t negotiate, don’t pay, and don’t fall for their lies. Loan sharks are not financial saviours - they are predators disguised as lenders, thriving on fear and misinformation.
By: Kpost
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