Loan Sharks Target Students on TikTok with "Quick Loans" and Influencers

Loan sharks are now using TikTok to target students with offers of “emergency loans” and “quick cash,” replacing traditional methods like posters on lamp posts. These illegal lenders are particularly preying on students addicted to online gambling or travel, offering easy loans that seem hassle-free.

A recent case revealed a 15-year-old from Selangor who racked up RM13,000 in debt to 12 loan sharks, all to indulge his girlfriend's cravings. Social media platforms, especially TikTok, have become lucrative for loan sharks, who pay influencers to advertise their services. Influencers can earn up to RM2,000 for just a few days of promoting these loans, which are often aimed at students seeking extra cash for vacations or other expenses.

Loan sharks lend between RM2,000 and RM5,000 to students, charging high interest rates of 10-20% per week. They often conduct background checks on the students' families, offering larger loans to those from wealthier households. If students fail to repay, their parents are pressured to settle the debts, sometimes paying much higher amounts due to accumulated interest.

Some students even earn commissions by referring friends to loan sharks. If parents refuse to pay, loan sharks resort to public shaming by putting up posters in the student's neighbourhood. Some desperate parents fall into further traps by seeking out middlemen who claim to negotiate with the loan sharks, only for these intermediaries to secretly take a cut, leaving the original debt still unsettled.