Nearly a year of crackdown on debt collection 'terrorists'

Debt collection in defiance of the law.

On March 28th, nearly a hundred police officers arrived at the building on Nguyen Dang Giai Street, Thao Dien Ward, Thu Duc City - the headquarters of Home Credit Vietnam Co., Ltd. The police worked with the company's leaders and employees, and also inspected several financial and lending activities suspected of irregularities.

Home Credit Vietnam Co., Ltd. was established and has been operating in Vietnam since 2008, providing "fast, convenient, and user-friendly" installment consumer finance products. Home Credit currently has its headquarters in Ho Chi Minh City, a branch in Hanoi, 8 representative offices, and over 9,000 service points in 63 provinces and cities nationwide. The consumer finance company has a presence in 10 countries including Russia, the Czech Republic, Slovakia, Kazakhstan, China, Vietnam, and India, with total assets reaching 14.7 billion Euros.

Also on March 28th, hundreds of police officers were present at Linh Tay apartment building, Linh Tay ward, Thu Duc City (Ho Chi Minh City) to inspect Galaxy Debt Trading Company, whose headquarters are located on the 1st and 2nd floors of Linh Tay Tower. This company is registered to conduct debt trading and financial activities. Authorities have not yet released any information regarding this inspection.

These are two of a series of recent raids and arrests by the police against financial companies and organized crime-style debt collection rings operating under the guise of law firms.

Police raid a financial company. Photo: CACC

Earlier, in mid-May 2022, Nghe An Newspaper published a series of articles."Debt collection through intimidation tactics is rampant."This reflects the situation where many citizens, leaders of agencies and schools, even those who did not borrow money, are threatened and "terrorized" in various ways to collect debts. Some teachers, unable to withstand the pressure, not only had their families and themselves threatened but also leaders and all teachers in the school, and had to resort to various means.submit a resignation letterIn some cases, simply because a parent borrowed money and failed to repay it, debt collectors tracked down the phone numbers of over 100 teachers throughout the school to harass them. In other schools, because a teacher's relative borrowed money, the school's leaders were subjected to fabricated photos, smeared with false accusations, and slandered. They even impersonated the school to deliver gas cylinders to the school as a threat. One head of the Department of Education and Training even received thousands of abusive phone calls every day…

Many of those involved in these cases stated that they had never previously borrowed money from any individual or organization. However, some admitted to borrowing money online from financial companies but were unable to repay it.

Shortly thereafter, on May 24, 2022, the Criminal Police Department of Hanoi Police, in coordination with the Criminal Police Department (Ministry of Public Security), dismantled the transnational loan sharking ring. 300 suspects from across the country were summoned, including many foreigners. According to initial investigations, borrowers only needed to take photos of their identity cards or citizen identification cards, then use their phone contacts as collateral and send them via an app. When they realized someone was unable to repay, the lending group would instruct their debt collection department to send threatening messages and make harassing calls to the borrower, their relatives, and other contacts in their phone's contact list. In many cases, they manipulated images of borrowers and posted them on social media to defame them and force them to repay the debt quickly.

A woman who led a group of debt collectors using "terrorist" tactics has been arrested. Photo: CACC

Huge profits

On November 4, 2022, the police conducted an administrative inspection of the office of Mirae Asset Finance Company Limited, subsequently arresting and prosecuting 13 people for defamation. This is a foreign company with its headquarters in Ho Chi Minh City, Vietnam, headed by LJ (a South Korean national) as General Director; it was granted a license by the State Bank of Vietnam with the function of "lending, including installment loans and consumer loans".

The tactic used by this company's employees was to require borrowers to provide personal information and information about their relatives when signing loan contracts; interest rates were as high as 4.58% per month, equivalent to 55% per year, in the form of monthly installments. When customers reached their payment deadlines, the debt collection department would categorize them by debt duration. For debts overdue for more than 180 days, employees would use phones and social media accounts to call, text, insult, threaten, or manipulate images of the borrowers and their relatives, combining them with obscene images, notices of debt collectors, or fraud warnings... to send to customers, their relatives, friends, and colleagues via social media platforms like Zalo and Facebook to pressure them into repaying the debt.

On December 1, 2022, the Ho Chi Minh City Police arrested and prosecuted 13 individuals from Power Law Limited Liability Law Firm on charges of defamation to extort debt. Investigators determined that approximately 300 victims nationwide had their reputations tarnished by this group, forcing them to repay debts. Not only the borrowers, but also their relatives, friends, and colleagues had their photos manipulated with malicious and false content and posted online to shame them.

A group of people specializing in making harassing phone calls to collect debts. Photo: CACC

On February 14th, dozens of armed police officers raided the headquarters of Phap Viet Law Firm (Ho Chi Minh City), catching nearly 130 people red-handed in connection with debt collection activities and seizing numerous pieces of evidence. This law firm had been registered for operation for about two years.

Investigators have identified thousands of people who were extorted by this company using gangster-style debt collection tactics. In connection with this case, police have arrested Tran Van Chau, Ho Quoc Hung (Deputy Director of Phap Viet Company), Nguyen Dinh Thanh (Head of Department and Team Leader), and at least 13 others on charges of extortion and suspected terrorism.

This group is accused of exploiting the guise of a law firm, collaborating with banks and financial companies to "handle bad debts." Subsequently, the law firm's employees engaged in gangster-style debt collection, psychologically terrorizing debtors through methods such as: making threatening phone calls and text messages; placing gas cylinders or bringing coffins to their homes; and threatening to detonate explosives at the debtors' or their relatives' offices to force payment.

In Can Tho, on March 3rd, police arrested Vo Thi Bich Tuyen (32 years old, residing in Long My, Hau Giang), the ringleader of a group of women specializing in debt collection via apps. During a raid on a house, police discovered 10 women engaged in debt collection activities for Bamboo Company and online lending apps. Initially, the suspects confessed that the operation was run by Chinese nationals. The debt collection group led by Tuyen consisted of individuals from other areas who rented the house to participate in the aforementioned debt collection ring.

On March 5th, Hanoi police initiated legal proceedings and detained 31 individuals for investigation into the crime of extortion. Among them, Tran Hong Tien, residing in Ho Chi Minh City, was the CEO of the group. This group established seven companies, purchasing debts that customers had borrowed from finance companies and other credit institutions but were unable to repay. They then used various tactics to psychologically intimidate the debtors. Data from the companies' management systems shows that from July 2018 to the end of 2022, the group acquired over 330,000 loan contracts totaling trillions of dong; they have recovered approximately 500 billion dong.

On March 6th, Ho Chi Minh City Police, in coordination with Go Vap District Police, cordoned off a section of road to search F88 Company, a large-scale financial lending company. Initially, investigators believe that debt collection staff at the company have been threatening borrowers, raising suspicions of extortion.

On March 15th, Ho Chi Minh City police arrested and detained 14 people, including managers, leaders, and employees of Vietnam Thinh Vuong Debt Trading Joint Stock Company (Ward 1, Tan Binh District) and the branch of The Young Generation Law Firm Co., Ltd. (Ward 15, Tan Binh District), on charges of extortion. Nguyen Minh Thanh (manager of Vietnam Thinh Vuong Debt Trading Joint Stock Company) and Tran Ha Anh Thu (Head of Credit Department, The Young Generation Law Firm Co., Ltd.) were identified as the ringleaders.

Previously, the Ho Chi Minh City Police received numerous complaints from citizens reporting that they were being repeatedly threatened by young men claiming to be debt collectors, who were sending threatening and defamatory images and insulting messages on social media. Even their friends, relatives, and workplaces were threatened by these individuals. Upon investigation, the police determined that those engaging in debt collection intimidation were employees of Vietnam Prosperity Debt Trading Joint Stock Company and a branch of The Young Generation Law Firm. They were assigned tasks by their superiors according to their rank (employee, manager, team leader); given debt collection targets and paid progressive commissions based on the total amount of debt recovered.

These two businesses purchased borrower profiles from a Hanoi-based finance company. Employees of Vietnam Prosperity Debt Trading Joint Stock Company were divided into four teams, each with 7-10 people. Each month, an average employee made 2,500-3,000 harassing calls to collect debts, recovering a total of 2-3 billion VND.

Police estimate that, with the frequency of debt collection described above, more than 100 people are paying back their debts and interest to this debt collection group each month. For each successful debt collection, the debt collectors receive up to 86% of the proceeds from the Hanoi-based financial company (where the debt was sold). Because of the enormous profits, the leaders of these debt collection companies have instructed their employees to relentlessly harass victims with increasing frequency and intensity.