'Fear of old age' when borrowing black credit

Due to needing money to develop a beverage production company, in November 2017, Mr. Nguyen Van Thanh (41 years old, Gia Lam, Hanoi) was introduced by his landlord to a man named Trinh to borrow money. He borrowed 2 installments, a total of 1.1 billion VND withinterest rate 4-9%/month

After 4 months of not being able to pay the full interest, Thanh was charged an interest rate of 24%/month (equivalent to 8,000 VND/1 million VND/day).By April 2018, Thanh had to pay a total of 350 million VND in interest. Unable to bear the burden, he proposed to pay back the principal and interest in installments over a few months, but was not approved.

In the following days, he, his wife and two young children were repeatedly threatened by a group of strangers. From July to October 2018, Mr. Thanh received phone calls many times "threatening to kill the whole family".

On October 12, 2018, a group of people poured shrimp paste all over his house and removed two surveillance cameras. Just one day later, while Thanh's family was sleeping, a group of brazen young men came and locked the door, poured iron glue into the locks to "lock" the family.

Still unable to pay off the debt because the amount was too large, he had to take his wife and children back to his hometown to take refuge. Believing that "this is a lesson he will never forget", he said he would try to earn money to pay off the debt to escape this nightmare. He hopes that many people will be more alert when borrowing capital to do business so as not to fall into "the same tragedy as him".

The police of Co Bi commune (Gia Lam district) said they had received a report from Mr. Thanh. After verification, the case was found to be complicated, the file was transferred to higher levels and the Gia Lam district police are handling it according to their authority.

Opening a construction company but running out of capital in less than a year, Mr. Dung (from Thai Nguyen) had to ask for help from a local financial company. Because he knew them, he did not have to mortgage them, he only wrote a receipt for a loan of 100 million VND with an interest rate of 3,000 VND/1 million VND/day.

According to Mr. Dung, the loan document does not state interest, but only the loan amount with the words "if not paid on time, the company will be subject to separate sanctions". However, he had to state the loan amount, interest, payment date and other agreements for the creditor to record as evidence.

After 3 months, Mr. Dung found that he could not pay, so the creditor suggested that he borrow money to have both capital and interest. Mr. Dung borrowed 30 million VND. Because he only received 24 million VND and had to pay 600,000 VND every day, in less than 1 month he "ran out of money".

In the following months, he received repeated phone calls from creditors, threatening to demand payment. One by one, each member of the family was pressured. "Once, when my wife took our child to school, they followed her and threw rotten eggs at the school gate," said Mr. Dung, adding that his son cried and wanted to quit school because he was scared.

More than 10 rough young men came to his house to take his motorbike and belongings. Because he still did not have enough money, every 3 days they brought a dozen people to eat and sleep, playing loud music and making a ruckus in the house. Unable to bear the pressure, Dung sold the house he was living in to pay more than 200 million VND (both principal and interest) to the financial support company. He and his wife and children then went to the South to start a new career.

200 black credit gangs are under scrutiny

Lawyer Pham Thanh Binh said that according to Article 474 of the Civil Code, when the due date comes, the borrower is obliged to repay the borrowed amount (principal and interest - if agreed). If the borrower commits fraudulent acts right from the time of the transaction or commits acts of dispersing assets, absconding... to appropriate assets or use the loan for illegal purposes leading to the inability to repay, then that person's actions show signs of a crime.Fraudulent appropriation of propertyorAbuse of trust to appropriate property.

However, the lender is not allowed to collect debts in a "gangster" manner. The person who collects debts himself or hires a "gangster" style debt collector may be held criminally responsible for the crime.Robberyor sinExtortion.

According to the Ministry of Public Security, in the past 4 years, there have been more than 7,600 crimes related to illegal credit activities nationwide, such as murder (56 cases), intentional injury (398 cases), robbery (629 cases), extortion (836 cases), property destruction (165 cases)... Of which, about 170 fraud cases were related to mobilizing high-interest capital with the amount of money appropriated reaching thousands of billions of VND.

In a recent report by the Ministry of Public Security, the police have investigated and are managing more than 200 gangs with nearly 2,000 people operating in organized loan sharking and debt collection. Black credit gangs often operate under the legal guise of financial businesses, companies, and enterprises.

Article 201 of the 2015 Penal Code stipulates that in civil transactions, anyone who lends money at an interest rate five times higher than the highest interest rate prescribed in the Civil Code (currently 20%/year), illegally profits from 30 to less than 100 million VND... will be fined from 50 to 200 million VND or sentenced to non-custodial reform for up to three years.

In case of illegal profit of 100 million VND or more, the offender will be fined from 200 million to 1 billion VND or imprisoned from six months to three years.

In case the loan sharking is not serious enough to warrant criminal prosecution, it may be subject to administrative penalties according to the provisions of Article 11 of Decree 167/2013/ND-CP with a fine of 5 to 15 million VND.