Crackdown on major loan shark operations

[rooster59]

Crackdown on major loan shark operations

By THE NATION

 

 

Illegal networks in four provinces face huge tax bills and criminal prosecution.

 

SIX MAJOR loan-shark networks are facing legal action for operating illegally and not paying taxes. 

 

The groups have a total cash flow of about Bt1.4 billion and own 3,400 rai of land. To date, they have also sued 1,800 debtors for not repaying their loans, authorities say.

 

“Some of these networks have never paid taxes,” Department of Special Investigation (DSI) director-general Colonel Paisit Wongmuang said yesterday. 

 

“As a result, the retroactive tax bill of the network that is based in Chaiyaphum province will be about Bt230 million.” 

 

Paisit said the five other networks were based in Phetchabun, with two active groups, Chiang Rai, Khon Kaen and Prachuap Khiri Khan. 

 

He added that the DSI had submitted details of the loansharks to the Revenue Department so that it could tax them retroactively. 

“This is on top of criminal proceedings they will have to face,” Paisit said. 

 

Speaking at the same press conference, Wisit Wisitsora-at, the Justice Ministry’s permanent secretary, said information gained so far suggested these loan sharks had taken advantage of their debtors, most of whom were farmers. 

 

“These farmers, as a result, are at risk of losing their land plots,” he said. 

 

Wisit emphasised that the government was committed to cracking down on this type of unregulated debt.

 

Interest rates charged by loansharks are much higher than those at legal financial institutions but many people turn to them because they offer easier access to money.

 

Loan sharks’ interest rates are often as high as 140 per cent a year and these exorbitant charges often weigh heavily upon loan recipients later on.

 

Wisit said the Finance Ministry had recognised people’s need to get emergency funds, which is a key reason behind the thriving illegal businesses. 

 

“So, apart from taking legal actions against loan sharks, the government has also prepared Pico Finance for people,” he said. The Pico Finance is widely interpreted as a government effort to bring loan sharks into the legal system.

 

The Finance Ministry’s Fiscal Policy Office is now accepting applications for legal entities interested in lending via Pico Finance. 

 

If their applications are approved by the Finance Minister, they will be allowed to charge up to 36 per cent in interest, fees and fines. 

 

“Under this system, people can seek a loan of up to Bt50,000 when they need cash,” Wisit said.

 

Pico Finance only allows its operators to grant loans to people living in their home province. 

 

Applicants for these loans do not always need to provide collateral. They may also be approved for smaller sums, such as living expenses, not just high-cost projects like buying a car, a home or renovating a house. 

 

Paisit also disclosed yesterday that the DSI was investigating an alleged loan-shark network in Pathum Thani. 

 

“We have not yet reported this network to the Revenue Department because we are in the process of seeking additional arrest warrants for suspects involved in the network,” he said.

 

He said warrants were being sought for persons who had collected money for loan sharks. 

 

Source: http://www.nationmultimedia.com/detail/national/30326812

 

 

-- © Copyright The Nation 2017-09-16

[Thaiwrath]

3 minutes ago, rooster59 said:

Loan sharks’ interest rates are often as high as 140 per cent a year

 And he rest. Try adding a few noughts on the end !

[Get Real]

28 minutes ago, rooster59 said:

Paisit also disclosed yesterday that the DSI was investigating an alleged loan-shark network in Pathum Thani.

That´s right! Out with the information before arrest warrants are issued. These people must have been paying something, somwhere, getting this fine chance to run for thier lives.

 

25 minutes ago, Thaiwrath said:

 And he rest. Try adding a few noughts on the end !

I guess that is almost true. The normal interest rate usually stays at 15% per month. That will be 180% per year.
I know there are networks that charge more, but that´s the ordinary cost.

[Chang_paarp]

Putting the tax department onto them will ensure grief for the miscreants for years to come even if they avoid criminal charges. 

 

[mikebell]

7 minutes ago, Chang_paarp said:

even if they avoid criminal charges. 

They've avoided criminal charges so far; why would anything change?  Only the envelopes get fatter.

[1337markus]

What number crackdown is this? Bit like the strategies to kerb road deaths at holiday season every year.

[Happyman58]

The big loan sharks have got the people who are on there payroll ( wont mention names) to get  rid of the small operators so there less competition When they do it will be

[Moti24]

"Illegal networks in four provinces face huge tax bills and criminal prosecution."

 

Get the money first and sort out the prosecution later!  Things don't change, do they!

[thequietman]

I would love to see a crackdown on crackdowns.

[Happyman58]

46 minutes ago, 1337markus said:

What number crackdown is this? Bit like the strategies to kerb road deaths at holiday season every year.

Every year big meetings We do this, We do that, We do nothing . Just get big money to attend meetings and go home and forget all

[Mickmouse1]

Police and Army use the service on regular basis but they are give preferential rates as low as 2% pcm.

?in return of.....

[oxo1947]

Wow the Thai money lenders are under selling themselves ---should pack up and move to the UK where the legal amount is 0.8% a day-- 292% PA...and the loan companies are getting it.

 

3 month Flexi Loan

3 monthly instalments you control

Borrow £150-£500

Term 3 months

Daily interest 0.8%

Interest rate 292% pa (fixed

 

https://www.wonga.com/interest-calculator

 

[hobz]

1 hour ago, thequietman said:

I would love to see a crackdown on crackdowns.

Or a "permanent crackdown" that runs longer than 2 weeks. 

The term permanent crackdown tells everything! It implies that a "regular crackdown" is temporary. Thus implying that laws are only enforced temporarily.. Haha

2 hours ago, 1337markus said:

What number crackdown is this? Bit like the strategies to kerb road deaths at holiday season every year.

 

 

2009 http://korat-info.com/forum/viewtopic.php?t=3473

2012 

2016 

 

There's probably more lol.

 

 

[wealthychef]

5 hours ago, Get Real said:

That´s right! Out with the information before arrest warrants are issued. These people must have been paying something, somwhere, getting this fine chance to run for thier lives.

 

I guess that is almost true. The normal interest rate usually stays at 15% per month. That will be 180% per year.
I know there are networks that charge more, but that´s the ordinary cost.

Actually 15% per month is 435% per year.  Work it out.  If you borrow 100 baht at 15% per month and wait one year to pay it off, you will owe 535 baht

[hawker9000]

6 hours ago, Chang_paarp said:

Putting the tax department onto them will ensure grief for the miscreants for years to come even if they avoid criminal charges. 

 

Maybe, but I doubt it.  The real crime in loan sharking in Thailand is hardly the mere nonpayment of tax.  It's the tactics used by "enforcers" against the debtors in collecting on these debts, the usury frequently involved, and the virtual economic slavery it imposes on these victims.  And borrowers, even mature adults who you'd think would know better, and who are simply and culturally incapable of assessing long-term consequences of debt, are easy prey.

 

 

[Get Real]

4 hours ago, wealthychef said:

Actually 15% per month is 435% per year.  Work it out.  If you borrow 100 baht at 15% per month and wait one year to pay it off, you will owe 535 baht

Yep, but they do not calcutlate it like that here. Usually the smartest sharks collect a small sum per day, which means that the amount doesn´t go up. 

Another is a flat 15% per month on the borrowed amount. That will then be 15 Bath a month, which will sum up to an interest of 180 Bath. There is 100 Bath with an addon of 280% 280, so that will be a total of 180% per year. 

Using normal calculations on interest you are perfectly on spot. Unfortunately that is not how things usually works here. Iguess that as usual anyway. 

[chama]

Some sharks weren't paying the police their cut...shame, shame, shame...your busted!

[blackcab]

14 hours ago, rooster59 said:

Applicants for these loans do not always need to provide collateral.

 

And that is a large part of the problem with the government's Pico finance scheme.

 

The government expects lenders to consider giving unsecured loans to sub prime borrowers who banks won't touch.

 

Then after the Pico finance company has failed to recover some of the loans, they will be expected to pay tax on any profits.

[gk10002000]

Tax evasion prosecution can be a powerful tool.  In the USA history it was very powerful against mobsters and gangsters such as Al Capone as a classic example.

[wealthychef]

18 hours ago, Get Real said:

Yep, but they do not calcutlate it like that here. Usually the smartest sharks collect a small sum per day, which means that the amount doesn´t go up. 

Another is a flat 15% per month on the borrowed amount. That will then be 15 Bath a month, which will sum up to an interest of 180 Bath. There is 100 Bath with an addon of 280% 280, so that will be a total of 180% per year. 

Using normal calculations on interest you are perfectly on spot. Unfortunately that is not how things usually works here. Iguess that as usual anyway. 

 

I get that if you just pay the interest each month it stays at 15%, but it's likely to me that if you borrow 10,000 baht and you are very poor that you are not going to be able to make your 1500 baht/month payments, and then you owe interest on the unpaid interest, and that's when it would start veering in the direction of 435%.  The only exception would be if they do they not charge interest on the interest like in the West, is that the case?