People usually want to get things done as quickly as possible, whether it’s making money or speeding up an application process. And why not, time is money!
This means that many will tend to believe the numerous scams and schemes out there, promising fast results and too-good-to-be-true returns.
If you ever find yourself unwittingly caught in one, below we’ve provided a simple course of action for you to take.
Bear in mind though, that this is just general information, and shouldn’t be taken as concrete legal advice. Always make sure to reach out to a lawyer for help!
You’ve been on the lookout for a home loan, when one day…
A well-dressed, well-spoken gentleman approaches you and introduces himself as Aaron from ‘ABC Bank’.
He then offers to help you to get a quick housing loan of up to 90% of the purchase price with a low interest rate. You decide to apply for it, and the application was approved immediately.
At this point, Aaron calls and requests you to pay the so-called processing fee of RM10,000 before the loan can be released to you. You pay the money without thinking too much about it.
Soon though, you realise, you’re no longer able to contact Aaron at all, and the loan never materialised.
Realising that you’ve been caught in a scam, what are the legal steps you can take to handle this?
Scenario 1: If the scammer is untraceable
First, you should determine whether Aaron indeed exists and works in ABC Bank. You should also check if there’s any document linking ABC Bank to the housing loan.
For example, documents bearing the letterhead and officer’s signature, loan agreement signed by both parties, etc.
If Aaron is an impersonator and there’s no agreement signed with ABC Bank, it would be very difficult to prove that ABC Bank has agreed to offer any housing loan to you.
After all, ABC Bank could just be an innocent party whose name has been used by the impersonator.
If you sue the wrong person in court, the court can punish YOU by asking you the pay the other side for the costs of defending the suit.
In such circumstances, unless you can really prove the true identity of the impersonator, it would not be viable to start any civil action to sue anyone.
It would thus be a better idea to cut your losses, learn from this (VERY) painful lesson, and move on with life.
After all, you could be suing a non-existent person and wasting good money into a hopeless case. Perhaps, if the police are able to arrest the impersonator, then the situation would be very different.
Scenario 2: The scammer is a legitimate person
Having said that, if you suspect that you’ve been cheated and that Aaron is a legitimate person (with ties to ABC Bank), quickly lodge a police report.
Upon launching an investigation, the police can arrest Aaron if he’s found liable for cheating you.
You see, under the Penal Code Section 420, it states that it’s a criminal offence for cheating and dishonestly inducing delivery of property.
If Aaron is found guilty, he can be jailed for a term between 1-10 years, whipping and a fine (that’s right, all 3!).
Secondly, you can consider filing a civil action in court against ABC Bank if there’s a loan agreement signed with ABC Bank.
As the contract is between you and ABC Bank, the proper party to be sued would be ABC Bank. You should also include Aaron, being ABC Bank’s employee or agent, as the co-defendant.
Under the Contract Law, any agreement caused by fraud, misrepresentation and coercion is voidable.
Simply put, this means that upon discovering the fraud, misrepresentation or coercion, you have the option of either:
- Insisting the agreement to be carried out
- Rescinding (read: terminate!) the agreement
If you choose option (1), you can insist on ABC Bank to honour the loan agreement by releasing the loan sum in accordance with the terms.
If you choose option (2), you can cancel the agreement and claim back whatever money has already been paid according to the loan agreement.
So, if you ever find yourself faced with a similar situation, do remember the following:
1) Home loans will only be approved in person
Bankers will NEVER offer and approve a housing loan through calls, SMS or social media.
In a housing loan application involving hundreds of thousands of Ringgit, the banks will always perform a strict check on your income, debt service ratio (DSR), CCRIS and CTOS scores to determine the maximum loan you’re eligible to apply.
You’ll be asked to submit an application form and supporting documents such as your latest 3 months’ pay slips for approval.
2) Signing of the offer letter and loan agreements
If you’re wondering why you have not gotten your loan despite months of waiting after signing a form, you should note this.
Banks will not grant and disburse a housing loan based on an application form alone. You’ll need to sign an offer letter issued by the bank and loan agreement prepared by the lawyer.
3) Nothing is free!
Banks will not grant a housing loan without taking some form of security (also known as collateral) to protect themselves.
Generally, a legal charge (property with title) or a deed of assignment (property under master title) over the property that you are purchasing would be executed for the bank.
The legal charge or deed of assignment will allow the bank to sell your property by way of auction, if you did not pay your installments on time.
In conclusion, it’s better to be cautious and careful when dealing with loan offers through calls, SMS or social media. If you’re ever in any doubt, simply call the bank directly to seek verification and clarification.
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Allen Khor is an advocate & solicitor in Messrs Allen Khor & Partners. His areas of practice include conveyancing, civil litigation, divorce, probate and administration. The telephone number of the firm is 012-283 0656.
*This column is for your information only and does not constitute legal advice for your specific needs. It cannot disclose all of the risks and other factors necessary to evaluate a particular situation. You should seek and obtain independent legal or professional advice for your specific needs and situation.
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