DSI shares tale of extreme loan-sharking as they build case against suspect

[webfact]

DSI shares tale of extreme loan-sharking as they build case against suspect

By The Nation

 

 

The Department of Special Investigation (DSI), the Army and police officers have raided three target locations in Bangkok, including a house of an alleged loan shark, as they sought to build a case against the loan shark, DSI chief Pol Colonel Paisit Wongmuang said on Wednesday.

 

The DSI Legal Aid Centre for Debtors and Victims of Injustice had received complaints about and initially investigated the loan shark – whose name has not yet been released – who provided loans at a 10-20 per cent monthly interest rate to people living mainly in Bang Khen and Lat Phrao areas, Paisit said. 

 

The raid led the officers to find “much incriminating evidence” at the suspect’s house, including a list of debtors' names and debt repayments, the debtors’ bank accounts and ATM cards and copies of lawsuit papers with the alleged loan shark's name as the plaintiff.

 

Officers gathered a total of 11 cardboard boxes and 13 bags of documents for further legal actions by the Royal Thai Police’s Action Centre for Prevention and Suppression of Public Fraud, Paisit said.

 

The DSI probe found that the loan shark allegedly operated an illegal money-lending business for 10 years, and had taken advantage of debtors by having them sign loan contracts with the borrowed amount exceeding the amount actually given, deducted a "fee" at 10 per cent of the borrowed amount before handing over the loan, and then charged a monthly interest rate of 10-20 per cent, Paisit said.

 

Some debtors were forced to sign even more unfair contracts, such having to pay a daily Bt200 interest on a loan of Bt10,000, with no lowering of the capital until the borrower can come up with the entire Bt10,000 in one go, he said.

 

Many were also not given receipts for debt repayment or were told to destroy such receipts. Others were about to fully repay their debt to the alleged loan shark were also bullied. The suspect allegedly threatened to send their loan contracts (containing the exaggerated loan amount) to court in a lawsuit to force them to pay the loan amount cited on paper, Paisit added.

 

From 2009 until now, the suspect had allegedly filed 460 lawsuits (374 civil lawsuits and 86 criminal lawsuits) against 852 debtors over debts worth Bt24.6 million, said Paisit.

 

Source: http://www.nationthailand.com/news/30372219

 

-- © Copyright The Nation Thailand  2019-07-03

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[Kaoboi Bebobp]

Quote

Some debtors were forced to sign even more unfair contracts, such having to pay a daily Bt200 interest on a loan of Bt10,000, with no lowering of the capital until the borrower can come up with the entire Bt10,000 in one go, he said.

 

This was told to me by a farang friend. He saw his Thai wife's mother hand over 1000 baht to a neighbour lady. He asked what was that for. His wife said she owed the neighbour 10,000 baht on a loan and pays 1000 baht a month, which did not even scratch the original loan amount. His mother-in-law would have to come up with the entire amount at once to cancel the debt. The monthly payments could go on for years without reducing the debt amount. Needless to say, he (and I) was shocked. He went to the ATM and brought over the 10,000 baht. The eyes of the neighbour lady, who was also his MiL's "best friend," shot daggers his way. 

[scorecard]

So the DSi does still exist.

[observer90210]

Why does the government, who is so caring of the welfare of the Thai's, not create a cooperative style, government supervised micro credit scheme all over the country for those who cannot fit into the mould of a regular bank ? 

 

The brown enveloppes handed over by the loan sharks seem to overlook the whole idea.

[timewilltell]

There are thousands of money lenders doing this using the Sale with Right of Redemption law where property is 'bought' interest is usually 3% per month but Interest is deducted up front and charged on an amount grossly in excess of the amount decalred in the land office and given to the seller - who is usually doing a scam themselves.

 

The property value is halved, then a fee added, the land transfer fees added along with a host of other fees and deductions for supposed agents who arranged it with the nest result that the money lender picks up a property at 20% of value as well as grabbing usury interest whilst the seller struggles not to lose the property. Extensions are of course grangted on request to keep the interest rolling and to 'show' the court how magnanimous the money lender is. 

 

The courts are totally disinterested that this process is going on and so it continues on. The real loser is typically not the person supposedly selling but the real owner of the property being scammed.

 

It is a national disgrace and a disgrace for the legal system that is disinterested even with multiple cases agaisnt the same mopney lenders again and again in the courts - and think of the cost of that.  Given the corruption in this country you can imagine a lot of money is available (the money from the people scammed used) to keep the whole nonsense rolling along.

 

Disgusting but typically Thai. Lots of foreigners get trapped with this scam and property.

[hotchilli]

Loan sharks provide what the banks won't give... money to the poor!

Banks sometimes are the worst offenders if you want to band the word shark around!!

 

I have a Thai friend who last year took out a 30 year mortgage with a well known bank on a town house, valued at 1.25 million baht payable in monthly installments.

When doing a quick add-up in my head & doing a sum it worked out at the end of 30 years the sum she would have paid back against  the cash price works out at 144% interest rate!!!

How's that for business?

[Dogmatix]

7 hours ago, timewilltell said:

There are thousands of money lenders doing this using the Sale with Right of Redemption law where property is 'bought' interest is usually 3% per month but Interest is deducted up front and charged on an amount grossly in excess of the amount decalred in the land office and given to the seller - who is usually doing a scam themselves.

 

The property value is halved, then a fee added, the land transfer fees added along with a host of other fees and deductions for supposed agents who arranged it with the nest result that the money lender picks up a property at 20% of value as well as grabbing usury interest whilst the seller struggles not to lose the property. Extensions are of course grangted on request to keep the interest rolling and to 'show' the court how magnanimous the money lender is. 

 

The courts are totally disinterested that this process is going on and so it continues on. The real loser is typically not the person supposedly selling but the real owner of the property being scammed.

 

It is a national disgrace and a disgrace for the legal system that is disinterested even with multiple cases agaisnt the same mopney lenders again and again in the courts - and think of the cost of that.  Given the corruption in this country you can imagine a lot of money is available (the money from the people scammed used) to keep the whole nonsense rolling along.

 

Disgusting but typically Thai. Lots of foreigners get trapped with this scam and property.

I have come across some of these deals and the borrowers are usually scrambling for cash to redeem their land from previous sale with the right of redemption contracts.  The cycle goes on until the money they need to borrow to pay interest and redeem exceeds what a borrower thinks he could sell the land for, if he got stuck with it. Rural Thais are addicted to credit and nothing that the DSI or government does in the existing frame of reference, i.e. without a decent micro lending bank, is going to change this. In fact I think it is all political games to make certain people look good with no sincere intention to reform the system of rural credit for the better.  The accusations that ceremonies to return title deeds to farmers were staged sound as if they may have credibility, although the accusations are in turn also political.  I suspect a lot of the fanfare about getting back title deeds has just been the regular work of the BAAC which always lends based on land collateral without caring what the cash is to be used for, the government has given it additional funding through the Pracharat scheme.  The borrowers who get their title deeds back will almost certainly have to hand them over to the BAAC after the ceremonies and many of them will end up being foreclosed on by the BAAC eventually.  At any rate the loans are generally for 5 years maximum but at least this gives the borrowers time to sell.  BAAC staff moonlight as land brokers and cherry pick the plots of foreclosed land to buy through nominees and quickly flip for a profit. 

[Burma Bill]

On 7/4/2019 at 12:43 AM, scorecard said:

So the DSi does still exist.

Very much so. Here in Khon Kaen the DSI has a large regional office complex near HomePro adjacent to route 2 heading south. Part of the complex was the Tourist Police Station which has now been relocated on the north side of the city.