Easy targets? Maids enticed by Lucky Plaza jewellers' 'S$0 upfront' deals buy gold to pawn for cash; some struggle to repay debts
Ili Nadhirah Mansor/TODAY
SINGAPORE — The glint of gold is apparent around Lucky Plaza, where a total of 39 jewellery shops span the Orchard Road mall’s seven storeys.
A jewellery store at Lucky Plaza on March 13, 2024.
A jewellery store at Lucky Plaza on March 13, 2024.
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Some foreign domestic workers in Singapore have taken to getting cash "loans" without going through licensed moneylenders
They buy jewellery via instalment plans with no upfront deposit, before proceeding to pawn them for cash
However, some are unable to repay pawn shop loans and instalments owed to jewellery stores that may charge a high interest on their items
Concerns have been raised about whether these stores are taking advantage of financially vulnerable workers
A migrant workers’ rights group urged employers to speak to their domestic workers to prevent them from getting into such situations
Published March 20, 2024
Updated March 20, 2024
SINGAPORE — The glint of gold is apparent around Lucky Plaza, where a total of 39 jewellery shops span the Orchard Road mall’s seven storeys.
Some of these storefronts are emblazoned with signs stating "$0 down payment", along with the word "hulugan" — or "instalment" in Tagalog, the Filipino language.
In these shops, Singapore’s foreign domestic workers may buy gold jewellery using instalment plans, taking the items home without paying a single cent upfront.
Except that some of them do not take the jewellery home. They pawn them immediately at one of Lucky Plaza’s many pawn shops for instant cash.
Foreign domestic workers, who were interviewed by TODAY at the mall over several days, said that this was a widely known method of obtaining a much-needed "loan" without going through licensed or illegal moneylenders, which began even before the Covid-19 pandemic.
Some of the interviewees said that such instalment plans can be a boon for them due to their low wages, but the downside is the prospect of being unable to pay off the debt owed to these shops, which can charge customers high interest for this instalment payment method.
A 49-year-old Filipino maid who bought a piece of gold jewellery and wanted to be known only as Ms Carlina, said that one store had added about S$100 in interest for every gram of gold.
For an item containing 3g of gold, a worker would pay S$300 on top of its price.
Ms Cyndelene Miranda, a 48-year-old Filipino who has been a domestic worker in Singapore for 13 years, said that around three in 10 of her friends have struggled to pay back what they owe these jewellery shops in instalments.
When this happens, it is not uncommon for them to buy another piece of jewellery — again on instalments — and pawn it in order to repay their original loan, thereby repeating the cycle of debt, she added.
When asked why this practice of pawning gold that has not been fully paid for was a popular avenue for raising money, Ms Miranda said that domestic workers are often under pressure to provide for their families back home.
They also find it difficult to turn down their family members’ requests for money, she said, regardless of why their family members needs the money.
A 48-year-old Indonesian domestic worker who has worked in Singapore for nine years said that she recently pawned a piece of gold jewellery she had previously bought on instalments in order to pay for her family’s expenses in Bintan.
She asked that her real name not be published, fearing reprisal from her employer.
For her, the appeal of buying gold jewellery is that she would get to safe-keep an item of value, even wear it, and later pawn the item if she needed money urgently.
Migrant workers’ rights group Transient Workers Count Too (TWC2) said that maids typically receive "no or little pay" during their initial months of work in Singapore because their salary goes towards paying off placement costs levied by employment agents.
"The financial stress that low-wage migrant workers in general are under may also cause them to act irrationally out of desperation," the group said.
Ili Nadhirah Mansor/TODAY
Ms Cyndelene Miranda (pictured) said that around three in 10 of her friends have struggled to pay back what they owe jewellery shops in instalments.
CONCERNS OF 'EXPLOITATION'
One employer, a 49-year-old in the finance industry, found out last month that his domestic worker had pawned a piece of gold jewellery for cash without completely repaying her instalments to the jewellery shop.
He did not want to be identified due to a dispute with the jewellery shop.
A pawn shop at Lucky Plaza had sent a letter to his address to inform the maid that her item would soon be forfeited if she did not repay her loan.
This was in line with how pawn shops operate — they typically offer a loan amount based on the value of the pawned item, and would later keep and sell the item if the loan is not repaid.
However, the employer expressed concerns that jewellery businesses might be "exploiting" these foreign domestic workers' financial vulnerability by charging high interest rates on their products, capitalising on their lack of knowledge of the prevailing market rates.
He said that his helper had "unknowingly" agreed to pay more than two times the market rate of gold for a piece of gold jewellery over three monthly instalments.
Additionally, when TODAY spoke to the sales workers at two shops in Lucky Plaza that offer instalment plans with zero upfront for gold jewellery, their staff members said that their shops do not allow Singaporeans to pay by instalments.
The owner of one such store, which also sells mobile phones and handbags, said that this was because the instalment plans were meant only to help foreign domestic workers who had "very low" salaries.
"It’s for them to be able to afford a piece of gold. For them to pay cash, it’s quite difficult… When we do hulugan (instalment), it’s easier for them to take," he said, adding that he did not want to be named for fear of being seen as running a dodgy business.
He added that he was aware of migrant workers who would buy gold jewellery from his store just to pawn them, but claimed that he would not sell to these customers, who often choose "heavyweight" items without bothering to try them.
Such customers are the "exception", he said, noting that the majority of migrant workers do not have trouble paying their instalments — though he declined to give a figure.
In any case, targeting an "economically weaker class" of workers does not run afoul of the law, a lawyer here said.
Mr Anil Balchandani of legal firm Red Lion Circle added that there is a maximum interest rate of 48 per cent per annum for moneylenders.
However, the practice of these jewellery stores providing instalment payment plans appears to be a form of hire-purchase agreement instead, where the balance of money owed is spread out over a fixed period.
Lawyer Ronald JJ Wong of law firm Covenant Chambers said that it is possible such an arrangement constitutes unfair consumer practices under the Consumer Protection (Fair Trading) Act, if a supplier knows that the consumer is not "reasonably able to understand the character, nature, language or effect of the transaction".
Renald Loh/TODAY
A store at Lucky Plaza advertising its pawning services in English and Tagalog.
MORE OPEN COMMUNICATION NEEDED
In response to TODAY’s queries, the Centre for Domestic Employees said that it was "aware of the potential exploitation of financially vulnerable migrant domestic workers" and that it has "escalated the situation to the relevant authorities".
The centre also urged employers to keep a lookout for any signs of distress that their domestic workers may face, and remind them to err on the side of caution when engaging with financial service providers.
TWC2, the migrant workers’ rights group, said that foreign domestic workers can be particularly vulnerable and fall prey easily to "supposed deals that sound too good to be true to the rest of us", since they might already be in debt upon arrival and lack financial literacy.
"As a society, we need to do better to protect the migrant worker population against exploitation," the group said.
"For migrant domestic workers, it starts at home through a culture of open communication and understanding, so that our helpers feel comfortable sharing their problems, which we may potentially be able to help with before they resort to risky solutions."
Agreeing, Ms Miranda the domestic worker said that she has heard numerous cases of her fellow Filipinos getting into moneylending troubles, and believes that such open conversations can help, along with financial education.
She noted, however, that it can be hard for maids to have that conversation with their employers more than once, especially if it involves asking for a salary advance.
"I (would) feel shy or embarrassed to keep asking... if it happens a few times, I think for the employers, it's also not nice."
Ultimately, she believes that some individuals need to take responsibility if they willingly spend more than they earn, and make use of such practices without considering its consequences.
In those cases, she said, "they can only help themselves".
Ili Nadhirah Mansor/TODAY
SINGAPORE — The glint of gold is apparent around Lucky Plaza, where a total of 39 jewellery shops span the Orchard Road mall’s seven storeys.
A jewellery store at Lucky Plaza on March 13, 2024.
A jewellery store at Lucky Plaza on March 13, 2024.
New: You can now listen to articles.
Sorry, the audio is unavailable right now. Please try again later.
This audio is AI-generated.
Some foreign domestic workers in Singapore have taken to getting cash "loans" without going through licensed moneylenders
They buy jewellery via instalment plans with no upfront deposit, before proceeding to pawn them for cash
However, some are unable to repay pawn shop loans and instalments owed to jewellery stores that may charge a high interest on their items
Concerns have been raised about whether these stores are taking advantage of financially vulnerable workers
A migrant workers’ rights group urged employers to speak to their domestic workers to prevent them from getting into such situations
Published March 20, 2024
Updated March 20, 2024
SINGAPORE — The glint of gold is apparent around Lucky Plaza, where a total of 39 jewellery shops span the Orchard Road mall’s seven storeys.
Some of these storefronts are emblazoned with signs stating "$0 down payment", along with the word "hulugan" — or "instalment" in Tagalog, the Filipino language.
In these shops, Singapore’s foreign domestic workers may buy gold jewellery using instalment plans, taking the items home without paying a single cent upfront.
Except that some of them do not take the jewellery home. They pawn them immediately at one of Lucky Plaza’s many pawn shops for instant cash.
Foreign domestic workers, who were interviewed by TODAY at the mall over several days, said that this was a widely known method of obtaining a much-needed "loan" without going through licensed or illegal moneylenders, which began even before the Covid-19 pandemic.
Some of the interviewees said that such instalment plans can be a boon for them due to their low wages, but the downside is the prospect of being unable to pay off the debt owed to these shops, which can charge customers high interest for this instalment payment method.
A 49-year-old Filipino maid who bought a piece of gold jewellery and wanted to be known only as Ms Carlina, said that one store had added about S$100 in interest for every gram of gold.
For an item containing 3g of gold, a worker would pay S$300 on top of its price.
Ms Cyndelene Miranda, a 48-year-old Filipino who has been a domestic worker in Singapore for 13 years, said that around three in 10 of her friends have struggled to pay back what they owe these jewellery shops in instalments.
When this happens, it is not uncommon for them to buy another piece of jewellery — again on instalments — and pawn it in order to repay their original loan, thereby repeating the cycle of debt, she added.
When asked why this practice of pawning gold that has not been fully paid for was a popular avenue for raising money, Ms Miranda said that domestic workers are often under pressure to provide for their families back home.
They also find it difficult to turn down their family members’ requests for money, she said, regardless of why their family members needs the money.
A 48-year-old Indonesian domestic worker who has worked in Singapore for nine years said that she recently pawned a piece of gold jewellery she had previously bought on instalments in order to pay for her family’s expenses in Bintan.
She asked that her real name not be published, fearing reprisal from her employer.
For her, the appeal of buying gold jewellery is that she would get to safe-keep an item of value, even wear it, and later pawn the item if she needed money urgently.
Migrant workers’ rights group Transient Workers Count Too (TWC2) said that maids typically receive "no or little pay" during their initial months of work in Singapore because their salary goes towards paying off placement costs levied by employment agents.
"The financial stress that low-wage migrant workers in general are under may also cause them to act irrationally out of desperation," the group said.
Ili Nadhirah Mansor/TODAY
Ms Cyndelene Miranda (pictured) said that around three in 10 of her friends have struggled to pay back what they owe jewellery shops in instalments.
CONCERNS OF 'EXPLOITATION'
One employer, a 49-year-old in the finance industry, found out last month that his domestic worker had pawned a piece of gold jewellery for cash without completely repaying her instalments to the jewellery shop.
He did not want to be identified due to a dispute with the jewellery shop.
A pawn shop at Lucky Plaza had sent a letter to his address to inform the maid that her item would soon be forfeited if she did not repay her loan.
This was in line with how pawn shops operate — they typically offer a loan amount based on the value of the pawned item, and would later keep and sell the item if the loan is not repaid.
However, the employer expressed concerns that jewellery businesses might be "exploiting" these foreign domestic workers' financial vulnerability by charging high interest rates on their products, capitalising on their lack of knowledge of the prevailing market rates.
He said that his helper had "unknowingly" agreed to pay more than two times the market rate of gold for a piece of gold jewellery over three monthly instalments.
Additionally, when TODAY spoke to the sales workers at two shops in Lucky Plaza that offer instalment plans with zero upfront for gold jewellery, their staff members said that their shops do not allow Singaporeans to pay by instalments.
The owner of one such store, which also sells mobile phones and handbags, said that this was because the instalment plans were meant only to help foreign domestic workers who had "very low" salaries.
"It’s for them to be able to afford a piece of gold. For them to pay cash, it’s quite difficult… When we do hulugan (instalment), it’s easier for them to take," he said, adding that he did not want to be named for fear of being seen as running a dodgy business.
He added that he was aware of migrant workers who would buy gold jewellery from his store just to pawn them, but claimed that he would not sell to these customers, who often choose "heavyweight" items without bothering to try them.
Such customers are the "exception", he said, noting that the majority of migrant workers do not have trouble paying their instalments — though he declined to give a figure.
In any case, targeting an "economically weaker class" of workers does not run afoul of the law, a lawyer here said.
Mr Anil Balchandani of legal firm Red Lion Circle added that there is a maximum interest rate of 48 per cent per annum for moneylenders.
However, the practice of these jewellery stores providing instalment payment plans appears to be a form of hire-purchase agreement instead, where the balance of money owed is spread out over a fixed period.
Lawyer Ronald JJ Wong of law firm Covenant Chambers said that it is possible such an arrangement constitutes unfair consumer practices under the Consumer Protection (Fair Trading) Act, if a supplier knows that the consumer is not "reasonably able to understand the character, nature, language or effect of the transaction".
Renald Loh/TODAY
A store at Lucky Plaza advertising its pawning services in English and Tagalog.
MORE OPEN COMMUNICATION NEEDED
In response to TODAY’s queries, the Centre for Domestic Employees said that it was "aware of the potential exploitation of financially vulnerable migrant domestic workers" and that it has "escalated the situation to the relevant authorities".
The centre also urged employers to keep a lookout for any signs of distress that their domestic workers may face, and remind them to err on the side of caution when engaging with financial service providers.
TWC2, the migrant workers’ rights group, said that foreign domestic workers can be particularly vulnerable and fall prey easily to "supposed deals that sound too good to be true to the rest of us", since they might already be in debt upon arrival and lack financial literacy.
"As a society, we need to do better to protect the migrant worker population against exploitation," the group said.
"For migrant domestic workers, it starts at home through a culture of open communication and understanding, so that our helpers feel comfortable sharing their problems, which we may potentially be able to help with before they resort to risky solutions."
Agreeing, Ms Miranda the domestic worker said that she has heard numerous cases of her fellow Filipinos getting into moneylending troubles, and believes that such open conversations can help, along with financial education.
She noted, however, that it can be hard for maids to have that conversation with their employers more than once, especially if it involves asking for a salary advance.
"I (would) feel shy or embarrassed to keep asking... if it happens a few times, I think for the employers, it's also not nice."
Ultimately, she believes that some individuals need to take responsibility if they willingly spend more than they earn, and make use of such practices without considering its consequences.
In those cases, she said, "they can only help themselves".
