Charging a fee for negotiating loan terms from loan shark is illegal.
In recent news, there have been reports of individuals who borrowed money from illegal money lenders. As they encountered difficulties repaying the borrowed funds, another group approached them, claiming to be able to negotiate with these illegal money lenders for better terms, albeit for a certain fee. These intermediaries are often referred to as 'loan intermediaries' and sometimes present themselves as non-governmental organizations (NGOs).
While offering assistance to individuals in debt is commendable, it's essential to note that charging a fee for negotiating with illegal money lenders is against the law in Malaysia. According to Section 29AA (1) of the Money Lending Act 1951, anyone who aids an illegal money lender in contravention of subsection 5(1) is committing an offense and may face a penalty of up to two years of imprisonment, a fine not exceeding RM20,000, or both upon conviction.