Any Stories About High Interest Loans?

[Phil Conners]

Ok Phil, by the way........... You must have the best avatar on this forum, great pic.

Thanks. Been a while since I've seen it in fact. Got so annoyed with the many animated gifs used as avatars that I disabled avatars (My Controls -> Do you wish to view members avatars when reading topics? -> No)

Would be nice if there was an option to view non-animated avatars and just hide the annoying ones....

[KireB]

Can any one tell me who the most debt ridden nation on this planet is?

MM

http://www.creditaction.org.uk/debtstats.htm

Average household debt in the UK is £8,833 (excluding mortgages) and £54,452 including mortgages.

Average owed by every UK adult is £28,024 (including mortgages). This grew by £168 last month.

Average outstanding mortgage for the 11.6m households who currently have mortgages is £95,170

Average interest paid by each household on their total debt is approximately £3,525 each year.

Average consumer borrowing via credit cards, motor and retail finance deals, overdrafts and unsecured personal loans has risen to £4,550 per average UK adult at the end of March 2007.

Britain's personal debt is increasing by £1 million every 4 minutes.

Must be lack of education ..................

Brits earn much more than Thais, so these numbers don't mean much! It's all about purchase parity!

When someone from Blackpool borrows 25,000 euros for a car, he'll be able to pay it back much faster than someone from Nakhom Sawan. In general ofcourse, he'll problably pay it back 5 times faster!

(average income in England 31,000 euros a year, Thailand 250,000 baht a year!)

[Johpa]

My wife told me about a neighbour who borrowed money to buy a car.

I asked her how much interest do you pay in Thailand?

She said 4%. I replied - "Oh that's very reasonable, 4% per year!"

Then she said "Oh no - 4% per month .. and the money lender takes a mortgage over their land as security.

48% per year - OMG! How do people fall for this?

Same way people in the US have credit cards with over 30% rates, and that does not include late fees and cash advance fees. Those check cashing places where you can get a loan on your paycheck also have interest rates pretty high up there. Regardles of nationality, poor people with no access to traditional credit from banks end up paying high fees to cover the risks involved. Trust me, if you needed gas money to get to work or to pay a medical bill, you too would accept these high fees if there were no other alternative.

[ajahnlau]

My wife told me about a neighbour who borrowed money to buy a car.

I asked her how much interest do you pay in Thailand?

She said 4%. I replied - "Oh that's very reasonable, 4% per year!"

Then she said "Oh no - 4% per month .. and the money lender takes a mortgage over their land as security.

48% per year - OMG! How do people fall for this?

I met a German guy who was telling me quite proudly that he was making good money

and aquiring blocks of land when people defaulted on payments.

I find this disgusting and immoral, charging outrageous interest and then grabbing land off

poor Thai people.

Take time to consider that these people are not good credit risks. If they were they'd borrow from a proper bank or farmers aid agency. Most have already done this and now borrow from high risk loan takers. Nobody is pointing a gun at their head to borrow these funds. Who's to take responsibility for these people? Your tax dollars?

[larvidchr]

Don't you feel that answer is just a bit insensitive.... perhaps even pompous? Is "individual responsibility" practiced by more than 10% of the populus here? I daresay, NO! And for those remaining 90%, well, let them eat cake!

Insensitive? I don't know. Frankly, whether it's insensitive or not is irrelevant. It doesnt stop it from being true.

As adults EVERYONE (unless they are handicapped in some way) should be accountable for their own lives, including their successes and failures. I don't see what's wrong with that as a philosophy as life.

No, I don't suppose more than 10% of the Thai populous are that way inclined. Further, I think even fewer in the nanny societies in the west are that way inclined - everything is always someone else's fault. If they get into debt, I hear people whine, it's because the banks made it so easy to borrow. <deleted>? If they get fat, it's because fast food companies make their burgers too tasty. <deleted>.

So, 90% / 10%? Yes, perhaps. I guess that's why 10% of the population generally own the vast majority of the wealth. As I said before, dog eat dog.

I don't always agree with Bendix, but on this one I'm right behind him. Everyone is responsible and should learn to stop diving in getting loans or daft buys. Worse in the west than Thailand, credit card debt transfer, easy loan this and that. Thai village guy I know goes and sells his entire families ancestral land to buy a lousy pick-up, the things worn out now and good for nothing, money down the drain!

You wanna have the cream then you gotta pay the piper!

Can't pay the piper? Then the Piper takes it away!

OT - yipee 600th post!

There is no law against being stupid or uneducated in money matters.

It is however a crime in almost every country to be a private loanshark, taking criminal advantage of the less fortunate and setting people up, in a position they cant get out of without loosing everything.

If everything was ruled by the "dog eat dog" I seriusly doubt that any of you two would be around today, we all need some level of protection against evil and uncaring wrongdoers, in all levels of human existence.

Kind regards

[chevykanteve]

Don't you feel that answer is just a bit insensitive.... perhaps even pompous? Is "individual responsibility" practiced by more than 10% of the populus here? I daresay, NO! And for those remaining 90%, well, let them eat cake!

Insensitive? I don't know. Frankly, whether it's insensitive or not is irrelevant. It doesnt stop it from being true.

As adults EVERYONE (unless they are handicapped in some way) should be accountable for their own lives, including their successes and failures. I don't see what's wrong with that as a philosophy as life.

No, I don't suppose more than 10% of the Thai populous are that way inclined. Further, I think even fewer in the nanny societies in the west are that way inclined - everything is always someone else's fault. If they get into debt, I hear people whine, it's because the banks made it so easy to borrow. <deleted>? If they get fat, it's because fast food companies make their burgers too tasty. <deleted>.

So, 90% / 10%? Yes, perhaps. I guess that's why 10% of the population generally own the vast majority of the wealth. As I said before, dog eat dog.

I don't always agree with Bendix, but on this one I'm right behind him. Everyone is responsible and should learn to stop diving in getting loans or daft buys. Worse in the west than Thailand, credit card debt transfer, easy loan this and that. Thai village guy I know goes and sells his entire families ancestral land to buy a lousy pick-up, the things worn out now and good for nothing, money down the drain!

You wanna have the cream then you gotta pay the piper!

Can't pay the piper? Then the Piper takes it away!

OT - yipee 600th post!

There is no law against being stupid or uneducated in money matters.

It is however a crime in almost every country to be a private loanshark, taking criminal advantage of the less fortunate and setting people up, in a position they cant get out of without loosing everything.

If everything was ruled by the "dog eat dog" I seriusly doubt that any of you two would be around today, we all need some level of protection against evil and uncaring wrongdoers, in all levels of human existence.

Kind regards

You got it, guy! A good, practical commentary on the situation. Thanks!

[Heng]

Frankly, I can't see what the problem is. So long as those interest charges - and the implications of defaulting - are made clear before the loan is taken out, surely it's not an issue for anyone other than the lender and the loanee to get involved in.

It's called individual responsibility. It's a curious thing but when we reach adulthood, we're meant to acquire some.

Well said.

[bendix]

It is however a crime in almost every country to be a private loanshark, taking criminal advantage of the less fortunate and setting people up, in a position they cant get out of without loosing everything.

If everything was ruled by the "dog eat dog" I seriusly doubt that any of you two would be around today, we all need some level of protection against evil and uncaring wrongdoers, in all levels of human existence.

Kind regards

Of course there are laws about being involved in criminal activity. What exactly is your point, except to hide a wooly argument behind emotional language?

I could just as easily counter that there is no law in Thailand against setting oneself up as a private lending agent, using completely lawful techniques to encourage repayment, and using purely market forces to determine - between the lender and the lendee - whatever interest rate both agree to.

As for your second comment about me not being around today, I have no idea what you're talking about. Perhaps you could expand your assertionto point where . . . . .ummm . . it starts to make hold some water.

[chevykanteve]

It is however a crime in almost every country to be a private loanshark, taking criminal advantage of the less fortunate and setting people up, in a position they cant get out of without loosing everything.

If everything was ruled by the "dog eat dog" I seriusly doubt that any of you two would be around today, we all need some level of protection against evil and uncaring wrongdoers, in all levels of human existence.

Kind regards

Of course there are laws about being involved in criminal activity. What exactly is your point, except to hide a wooly argument behind emotional language?

I could just as easily counter that there is no law in Thailand against setting oneself up as a private lending agent, using completely lawful techniques to encourage repayment, and using purely market forces to determine - between the lender and the lendee - whatever interest rate both agree to.

As for your second comment about me not being around today, I have no idea what you're talking about. Perhaps you could expand your assertionto point where . . . . .ummm . . it starts to make hold some water.

Quite!

[Heng]

If everything was ruled by the "dog eat dog" I seriusly doubt that any of you two would be around today, we all need some level of protection against evil and uncaring wrongdoers, in all levels of human existence.

True, but the only protection one needs against amassing debt (oneself) is common sense. The gov't cannot teach that.

[chevykanteve]

If everything was ruled by the "dog eat dog" I seriusly doubt that any of you two would be around today, we all need some level of protection against evil and uncaring wrongdoers, in all levels of human existence.

True, but the only protection one needs against amassing debt (oneself) is common sense. The gov't cannot teach that.

Quite, 'Ol Boy! So why even bother to educate the masses? Keep'em dum so we can manintain a "rightful" rule! And if they object? Well, send in the regiment and sort them out!

[Heng]

If everything was ruled by the "dog eat dog" I seriusly doubt that any of you two would be around today, we all need some level of protection against evil and uncaring wrongdoers, in all levels of human existence.

True, but the only protection one needs against amassing debt (oneself) is common sense. The gov't cannot teach that.

Quite, 'Ol Boy! So why even bother to educate the masses? Keep'em dum so we can manintain a "rightful" rule! And if they object? Well, send in the regiment and sort them out!

Educate the masses to common sense? Folks who can't swim know they can't swim... what can one do if they are going to jump in anyway? As mentioned by another poster, people don't go to pawnshops, private money lenders, and total strangers until they've been turned away by finance companies and banks. That's usually enough of an "education" right there for folks with common sense.

[larvidchr]

It is however a crime in almost every country to be a private loanshark, taking criminal advantage of the less fortunate and setting people up, in a position they cant get out of without loosing everything.

If everything was ruled by the "dog eat dog" I seriusly doubt that any of you two would be around today, we all need some level of protection against evil and uncaring wrongdoers, in all levels of human existence.

Kind regards

Of course there are laws about being involved in criminal activity. What exactly is your point, except to hide a wooly argument behind emotional language?

I could just as easily counter that there is no law in Thailand against setting oneself up as a private lending agent, using completely lawful techniques to encourage repayment, and using purely market forces to determine - between the lender and the lendee - whatever interest rate both agree to.

As for your second comment about me not being around today, I have no idea what you're talking about. Perhaps you could expand your assertionto point where . . . . .ummm . . it starts to make hold some water.

Private Loan Sharks in Thailand are operating outside Thai law, there is a maximum allowed interest rate, they would have to be registred and pay income tax, there is a long list of administrative regulations they would have to follow, and a list of consumer regulations designed to protect the consumers. None of them do this, Ie loan sharking is illegal.

And if you dont understand what the "dog eat dog " term implies, if that was the rule we all abided by, I suggest you stop using it.

I do however understand why you would like things to hold water, you seem to be a bit of a cold fish.

Kind regards.

[bendix]

Jeez . how complicated does this have to be. Yes, of course, illegal loan sharks operating illegally are illegal. That's not what I'm saying. Of course, it could be pointed out that at no point are the borrowers, which the whole of this thread concerns, FORCED to use them or any other lender.

Authorised money lenders are - of course legal - whether they operate in banks or not.

Could you please direct me to the source of your assertion that there is a maximum allowed interest rate for loans between consenting adults?

Edited May 9, 2007 by bendix

[Edonista]

I met a German guy who was telling me quite proudly that he was making good money

and aquiring blocks of land when people defaulted on payments.

How can he be doing that ? Farangs cannot own land in Thailand !

[wolfmanjack]

It is however a crime in almost every country to be a private loanshark, taking criminal advantage of the less fortunate and setting people up, in a position they cant get out of without loosing everything.

If everything was ruled by the "dog eat dog" I seriusly doubt that any of you two would be around today, we all need some level of protection against evil and uncaring wrongdoers, in all levels of human existence.

Kind regards

Of course there are laws about being involved in criminal activity. What exactly is your point, except to hide a wooly argument behind emotional language?

I could just as easily counter that there is no law in Thailand against setting oneself up as a private lending agent, using completely lawful techniques to encourage repayment, and using purely market forces to determine - between the lender and the lendee - whatever interest rate both agree to.

As for your second comment about me not being around today, I have no idea what you're talking about. Perhaps you could expand your assertionto point where . . . . .ummm . . it starts to make hold some water.

There are laws that stipulate what usury is. According to the book I have the interest rate is limited to 15% per year and interest shall not bear interest.

Having said that my sister in law borrowed money at 7% per month to open a business. Now she has 4 locations. In 2004 she paid 800,000 baht cash for a new car and last year she bought a new house for 2 mill. This was not paid for with cash though. The point is that if this illegal loan was not available she would not be in the good financial position she is in now.

[bendix]

[

There are laws that stipulate what usury is. According to the book I have the interest rate is limited to 15% per year and interest shall not bear interest.

if you're implying that the maximum allowable interest rate is 15% and that interest accrued shall not bear interest, EVERY credit card company in Thailand (indeed, around the world) is breaking the law.

i find that very hard to believe.

[Edonista]

Can any one tell me who the most debt ridden nation on this planet is?

MM

http://www.creditaction.org.uk/debtstats.htm

Average household debt in the UK is £8,833 (excluding mortgages) and £54,452 including mortgages.

Average owed by every UK adult is £28,024 (including mortgages). This grew by £168 last month.

Average outstanding mortgage for the 11.6m households who currently have mortgages is £95,170

Average interest paid by each household on their total debt is approximately £3,525 each year.

Average consumer borrowing via credit cards, motor and retail finance deals, overdrafts and unsecured personal loans has risen to £4,550 per average UK adult at the end of March 2007.

Britain's personal debt is increasing by £1 million every 4 minutes.

Must be lack of education ..................

Combined with lack of money also...

[larvidchr]

Jeez . how complicated does this have to be. Yes, of course, illegal loan sharks operating illegally are illegal. That's not what I'm saying. Of course, it could be pointed out that at no point are the borrowers, which the whole of this thread concerns, FORCED to use them or any other lender.

Authorised money lenders are - of course legal - whether they operate in banks or not.

Could you please direct me to the source of your assertion that there is a maximum allowed interest rate for loans between consenting adults?

Im sorry no, I saw it the other day on the net somewhere, rules for financial institutions in Thailand, and there where different lofts set for intrest on credit cards and personal loans aso. I think it was 28 % for personal loans and a little less for credit cards. try and google it.

Regards.

[xerostar]

How can he be doing that ? Farangs cannot own land in Thailand !

Sorry, I should have been more specific.

His Thai wife does the organising.

He just supplies the money for the loans.

[wolfmanjack]

[

There are laws that stipulate what usury is. According to the book I have the interest rate is limited to 15% per year and interest shall not bear interest.

if you're implying that the maximum allowable interest rate is 15% and that interest accrued shall not bear interest, EVERY credit card company in Thailand (indeed, around the world) is breaking the law.

i find that very hard to believe.

From what I understand the credit card companies here in thailand operate under a special regulation set up for them.

According to the book on Civil and Commercial Code that I have. (Any one know of an update ? Mine is 6th edition 1996 which was the only one available when I bought mine in 2004.) Title 9 Chapter 2 Section 654 Interest shall not exceed 15% per year; when a higher rate of interest is fixed by the contract, it shall be reduced to 15% per year. Section 655 Interest shall not bear interest. (It also stipulates that commercial enterprise ie banks and financial companies are not subject to this since they are allowed compound interest.)

Maybe this law has been changed to allow higher rates but i doubt it.

[wolfmanjack]

Jeez . how complicated does this have to be. Yes, of course, illegal loan sharks operating illegally are illegal. That's not what I'm saying. Of course, it could be pointed out that at no point are the borrowers, which the whole of this thread concerns, FORCED to use them or any other lender.

Authorised money lenders are - of course legal - whether they operate in banks or not.

Could you please direct me to the source of your assertion that there is a maximum allowed interest rate for loans between consenting adults?

Im sorry no, I saw it the other day on the net somewhere, rules for financial institutions in Thailand, and there where different lofts set for intrest on credit cards and personal loans aso. I think it was 28 % for personal loans and a little less for credit cards. try and google it.

Regards.

If i remember right i read in the post that the 28% is for credit cards and there was a group of people trying to get it lowered since they thought this was too high. The credit card companies said that they could not make any money if the rate was lowered. The counter was make a better check on the people applying instead of giving credit to high risk people. Not sure what happened since i did not see a report after that.

[aaaaaa]

Is there an official Thai government telephone number available to complain about such matters?

yes, there is, see this page: http://www.consumidoresint.org/miembros/de...pais.asp?id=527

Consumer Protection Board of Thailand

Titular: Rasamee Vistaveth

Ingreso a CI: 15-03-1997

Dirección:

Office of the Consumer Protection Board

Government House

Rajadamnern Nok Avenue, Dusit

Bangkok 10300

Tailandia

Tel.: +(66) 2 62 9 8256-6

Fax: +(66) 2 629 8267

E-mail: [email protected] [email protected]

I didn't have much time to search more - I bet there are other pages, especially in Thai language.

I have stumbled upon this subject while reading some Nation's articles about loans, debt-collector practices and Easy Buy.

apparently there were efforts made for few years already to figure out the ways to restrain improper tactics of loan sharks.

like, this article is almost 2 years old already (click on underlined text):

CONSUMER DEBT RELIEF: Peeraphan urges cut in loan cap

Published on December 16, 2005

Chairman of govt’s non-bank panel suggests top rate of 15-20% for personal debts. The chairman of the committee to solve non-bank loan problems has proposed that personal-loan rates and fees be capped at an annual rate of 15-20 per cent, rather than the current 28 per cent set by the Bank of Thailand (BOT)....

In a separate development yesterday, the Foundation for Consumers petitioned the BOT to revise its ceiling for non-bank creditors’ personal loan rate of 28 per cent, saying the ceiling went against civil and commercial law. The foundation issued a press release saying laws currently stipulate personal loan rates should be no more than 15 per cent.

A BOT official said yesterday she had accepted the petition and would present it to the BOT governor.

Suwat Samphaokaew, an employee who is a debtor of Easy Buy Co Ltd, said that debt-collection companies had made threats to some debtors in regard to their children’s safety.

He said he borrowed principal of Bt50,000 from the loan company but received only Bt49,000, because the company charged interest of 0.93 per month and a fee of 4.66 per cent for credit usage. He did not know how many instalments he had to make, because Easy Buy only told him he had to pay monthly instalments of more than Bt2,000. After paying Bt26,000, he was informed he had 50 instalment left.

Wanwarin said the foundation had recorded up to 20 calls from debtors complaining of unfair charges from personal-loan providers.

now, that was 2 years ago. any progress since then?

it looks like there is some....

Edited September 29, 2007 by aaaaaa

[aaaaaa]

a bit long post on Nation's blog: http://blog.nationmultimedia.com/reallifet...7/09/04/entry-1

- just scroll down to the part which talks about "Household debt"

now, has anything been done since Dec 2005 about restraining loan sharks?

interesting to know that at this very period of time there is something big happening regarding this matter!

Google Advanced search for only keyword "debt" of only Nation's website (copy and paste: "debt" site:nationmultimedia.com) for past 3 months has given 300 results

apparently, as many have already said on this tread and elsewhere (like on that blog) - Household debt is only increasing.

and naturally, shark loan harass more and more people in worst and worst ways.

Debt collectors hounding card holders

Published on August 27, 2007

Credit-card holders and other borrowers yesterday complained to police that they were being intimidated by debt collectors. "They charge exorbitant interest rates. And, when they demand repayment, [collectors] use violent and aggressive approaches," Consumer Rights Protection Centre leader Itboon Onwongsa told Crimes Suppression Division police. Itboon added that debt collectors were impolite, intimidating and abusive.

"These are civil matters, not criminal," Itboon said. Credi-tors could sue debtors, not threaten or humiliate them through illegal means. He said some creditors demanded repayment from relatives and employers, subjecting debtors to disgrace. Itboon demanded 41 lenders, debt-collection agencies and credit-card companies be charged with defamation, extortion and intimidation.

Division inspector Lt-Colonel Wiriya Sujarit said it would investigate the allegations before considering action.

"We may consult the Consumer Protection Board and other agencies, too," he said. A debtor who identified herself as Moo Saming said she was in the red to the tune of Bt1.2 million. She spent on her credit card, took out personal loans and borrowed from "other" money lenders.

"Late last month, one creditor called me between 2am and 5am. They called my mother, too, and rebuked her for not raising her daughter well. She told me off. I wanted to commit suicide," Moo said. Her attempt failed.

"Later I learned what the creditors were doing was wrong. I want to fight back," she said.

this was in the end of Aug, just 1 month ago

[aaaaaa]

problem is still there, and more and more people complain, and it looks like some REAL measures are upcoming

here is another article about 2 weeks later (after that previous one on Aug 27):

Rein in hardball debt collectors

Published on September 13, 2007

Responding to complaints from many harassed debtors, an ad hoc National Legislative Assembly (NLA) committee is drawing up a set of guidelines to ensure creditors and collectors treat debtors fairly and respect their privacy in the course of pursuing repayment. The NLA will be putting together what it calls appropriate debt-collection practices to be submitted to the Finance Ministry and the Bank of Thailand, which are expected to issue clear-cut rules that recognise debt collection as a legitimate and necessary business activity and also guarantee consumers their rights to privacy and freedom from undue harassment. Any forthcoming regulations must be aimed at striking a delicate balance, protecting both creditors and debtors in as equitable a fashion as possible.

After all, debtors voluntarily entered into agreements with their creditors and therefore are legally bound to pay or repay the amounts specified in the contracts they signed. Creditors have the indisputable right to take reasonable measures to secure payments when they become due. But then "reasonable measures" can mean different things to different creditors and the debt collectors they employ. In most cases, courteous but insistent phone calls to a customer's office or home to remind them of their obligations and the possible consequences if the debt is not paid is enough to persuade a debtor, who is a few months behind, to pay up.

It is worth noting that debt collection involving credit cards and personal loans is the most problematic because the amounts owed are usually not significant enough to warrant court proceedings. That's why many creditors hire professional debt-collection companies to try to secure partial or full payment. [an Important point I think !]

There are also some debtors who have neither the ability nor the inclination to honour their legal obligations despite reasonable steps being taken by creditors and debt collectors to try to get them to pay up or negotiate repayment plans. In these cases, some unkind, unconscionable debt collectors, who get paid a certain percentage of the amount recovered, deem it necessary to resort to nasty tactics.

According to news reports, extreme and downright indecent debt-collection practices include abusive phone calls to the homes and offices of debtors and messages being left with a third party, such as a work colleague or a family member, demanding the debt repayment with the aim of embarrassing the concerned party.

In one extreme example, which was widely publicised, a debt collector went into a school and informed the teacher and possibly other students that the parent of a particular student owed his creditor a lot of money. Dirty tactics such as these can never be justified regardless of the behaviour of debtors.

Obviously when financial authorities sit down to consider the proposal from the NLA committee, there will be plenty of examples offered as to how other countries deal with similar problems. For example, the US Federal Trade Commission and the Australian Competition and Consumer Commission have developed and put in place well-thought out guidelines on fair debt-collection practices.

In addition, financial authorities should also seek inputs from creditors, including banks and financial institutions and debt-collection companies, and get them involved in enforcing proper standards now, as well as ensuring that they conform to the new rules on fair debt-collection practices once they are enacted into law.

Training on fair debt-collection practices must be made mandatory for the personnel of debt-collection companies. Preferably, debt collectors must be required to complete training to qualify for their jobs. A new body will have to be created to screen and handle complaints regarding debt-collection practices deemed inappropriate or in violation of debtors' privacy. That is not to say fraudulent debtors, who seek to escape their obligations and take liberties with other people's money, should be protected from the usual discomfort and embarrassment that comes with being hounded by creditors and debt collectors, as long as the tactics being employed are lawful and decent. Credit-card issuers and banks on the other hand should do a better job of screening the credit ratings and financial standing of their prospective customers to minimise non-performing loans and thereby avoid the costly and time-consuming process of debt collection.

P.S. sorry, pasted wrong article at first, now it is the correct one.

Edited September 29, 2007 by aaaaaa

[aaaaaa]

and here is perhaps the most recent article on this matter merely 10 days ago:

Banks told to act on complaints

Published on September 19, 2007

It's a dirty job and someone's got to do it, but debtors' privacy and rights must not be violated in the process.

Otherwise, they may be disciplined under the upcoming Financial Institutions Business Act.

The new system is one of three practices that creditors are required to adopt as guidelines for their business. They must also ensure appropriate debt-collection procedures and take responsibility for customers who suffer from any actions by debt-collection companies they hire.

The move comes after a meeting with credit providers to seek agreement on debt-collecting from individuals after a group of consumers complained to the central bank about harsh and inappropriate methods used by debt collectors.

They claimed that collectors were impolite, used threatening behaviour and failed to keep customer data confidential.

Risk Management Policy Office director Somboon Chitphentom yesterday said banks and non-banks should set clear policies and procedures for responding to complaints and pursuing debtors. Each company's executives are required to acknowledge such procedures.

Under the guidelines, debtors should be able to contact lenders and make formal complaints. Financial players can establish any organisational structure to comply with the customer-service requirement, he said.

"They should have procedures to handle customer complaints, so that they will know how they have been affected by the businesses," he said.

Once the guidelines have been in use for a while, the BOT will evaluate their efficiency - how well lenders have followed the requirements.

He is optimistic that credit companies will listen to the BOT even though the guidelines have been introduced without grounds for legal enforcement.

"They usually give good cooperation whenever we ask them, but we may consider punishing those who don't follow the practice strictly," he said.

Lenders are also limited to contacting debtors from 8am to 8pm on weekdays and 8am to 6pm on weekends. They cannot ask a debtor's relatives or colleagues to shoulder the debt without a legal order or permission from the debtor.

They are prohibited from trying to hurt debtors physically or destroy their reputation.

Anoma Srisukkasem

The Nation

well, that's quite some progress since Dec 2005 - isn't it?

I really applaud this coming soon regulation !

at least debtors will get some means to fight back.

[aaaaaa]

however I didn't see anything said about cutting down the max monthly percentage - which was discussed in that article on Dec 2005. will this Financial Institutions Business Act do something about it?

I think must. because otherwise it will be like a lame attempt to solve this problem, because the whole business of these lon shark companies based and depends on :

- absence of such regulation (of max allowed monthly percentage);

- greed, stupidity, irresponsibility and may be even illiteracy of majority consumers;

- shark loan companies full confidence in plentiful loopholes in Thai law on one side and on other side in debtors inattentiveness and inability to pay in time

well, on some Thai discussion boards regarding this matter (I was told) there were quite a few opinions also about another reason, may be one of if not THE main:

- although most of these loan/ credit companies are of Japan origin (Aeon, Easy-Buy and some other), each of them has some Thai partner or shareholder. and the thing is - those people are in some high positions.

that makes sense: it explains well why this business is so lucrative and why for so long not much has been even attempted to be done about it.

as usually, the favorite slogan is: TIT !

let us see what will be the development of this issue.

but I think there is something definitely happening - because I was told by some Thai people I know that recently the HUNT by such companies is renewed with stronger force and perhaps harsher conduct. my guess is - ALL these "loan shark" companies are perfectly aware of the upcoming "Business Act" and that after it is made an actual LAW they won't be able to harass their debtors as much and as brutally as they could do before - well, at least not without remaining unpunished for that themselves. therefore I think they are being desperate and employ all the possible means to get whatever they can back from those they can catch or bully in.

I suggest to all people who have this problem to hold on a bit longer ! and also - KNOW YOUR RIGHTS! use internet for fart sake, read all the experience and advices by fellow debtors and even by some lawyers.

before you even talk to whoever debt collector (usually they say they are from some lawyer company) or answer ANY question - DEMAND (yes, treat bullies in the same way they treat you) to INTRODUCE himself - give full first and last name, company name etc. and say that if they continue misconduct, disturb your privacy, threaten you and your family - you will complain to Police and appropriate government office - as that Consumers Protection board.

and if some harassment and threatening phone calls etc happen - know where to complain or seek help!

I think Thai Visa and its members might try to provide some contacts in Engl (and Thai websites?) where people can get such help? I think THAT would be realy useful, because I am sure that the number of TV members with Thai wifes is huge - and therefore SURE there are some of them directly (wives or immediate relatives) or indirectly (friends, relatives, neighbors, co-workers etc) or even employees in some farang's company (as I've read on some other thread on TV) - are involved or witness such case of improper conduct by debt-collectors!

the thing is: these debt-collectors are mostly NOT even from the lender company! they are usually some lawyer company (or so they say) in best case, or even some illegitimate / unlicensed / private fellow - perhaps almost bouncers or racketeers.

AND another thing to remember is what was mentioned in some of quoted Nation's articles:

- such cases are CIVIL - NOT criminal !

- the amount which most of debtors are usually own to lender is NOT that big to press criminal charges - that is why lender company themselves can't suit the debtor but rather have to employ legal (as lawyer companies) or illegal (as racketeers) "helpers"

so, I think IF Thai people get more information about it and know how to fight back and where to seek help - then those "loan sharks" will be restrained at least to certain extent!

[aaaaaa]

most recent article on this matter - just 5 days ago

Tighter rules for debt-collectors

Published on September 24, 2007

Credit-card and personal-loan debtors who have delayed their payments will no longer be haunted by phone calls day and night from debt-collectors following the introduction by the Bank of Thailand (BOT) of guidelines on debt-collection to promote consumer protection.

The three main guidelines cover contacting debtors, hiring debt-collecting companies and setting up procedures about customers' complaints.

They aim to allow debt-collectors to do their duty in proper ways as many debtors have been threatened harshly, especially by outsource companies, to pay their debts.

However, the BOT emphasised that the new practices did not encourage debtors to avoid creditors or drop their payments.

Any debtors called for debt-payment after 8pm on weekdays and 6pm on weekends can claim invasion of privacy. They can request their privacy rights too if they receive phone calls too frequently.

According to the first guideline, debt-collectors are asked to contact debtors between 8am and 8pm on weekdays and 8am and 6pm on weekends or holidays.

The debt-collectors must identify themselves by properly informing debtors of their names and the objectives of the contact. In face-to-face contact, they must show evidence guaranteeing their authorisation by creditors.

Debt-collectors are also required to ask debtors for payment directly. They cannot contact the debtors' relatives and colleagues, except if they obtain permission or legal rights.

The second guideline requires commercial banks or non-bank companies to take responsibility for their debt-collectors. They should take into account the debt-collectors' backgrounds, financial status and personnel management before signing contracts for hire.

The final guideline requires creditors to set up proper procedures to receive customers' complaints. Their executives are also expected to acknowledge the problems of customers.

Most financial institutions confirm that they deal with customers about debt-collection by polite methods and appropriate practices.

Kasikornbank normally uses its own staff for debt-collection. Under the bank's guidelines, employees must be polite when dealing with borrowers, particularly premier customers.

The staff address customers politely, remind them of the due date, ask them when it would be convenient to make payment and inform them about payment channels.

The bank also has a delivery service for debt payment.

Borrowers who are premier customers receive privileged service.

Beside the gentle loan-collection methods, they are asked how long payment will be delayed. General customers are told to make immediate payment on the due date.

Debt-collectors of Citi Bank are forbidden manners that are unsuitable in Thai culture, for example telling a teacher to tell his student whose parents are debtors to repay the loan. Debt-collectors are also not allowed to disclose to others personal financial information about the bank's customers.

Dirty tactics such as calling debtors' family members or work colleagues to demand repayment so as to embarrass the debtor are not allowed at the bank.

GE Money Thailand does not allow its debt-collectors to call customers more than five times a day.

KrungThai Card (KTC) also pays attention to the issue in order to maintain its image. It discharges its outsource debt-collection firms immediately after receiving customer complaints about inappropriate action.

Anoma Srisukkasem,

Somruedi Banchongduang

The Nation

wow - no more than 5 times a day, huh? sooooooooooooo kind !

however once again - NOTHING is said about cutting down the max allowed percent

may be this whole show is actually arranged before a REAL shake off of debts starts? sort of - see, now we have this law, all debt-collectors behave and follow it properly - there is no more excuses for irresponsible debtors to keep avoiding paying back to lenders?

any thoughts?

[aaaaaa]

looks like BoT uses "stick and carrot tactic"!

perhaps after all I am quite correct in my guess that this Business Act is a preparation for real endeavors to make debtors to pay back. because according to some source - at present day Household debt in Thailand accounts for 30% of GDP ! naturally it is a big concern for government.

however BoT instead of decreasing monthly percentage decided to ... increase it !

Finance Ministry, BoT Urged To Improve Debtor Protection Law

Mass Communications Organization Of Thailand

Sep 3 2007

The Finance Ministry and the Bank of Thailand should improve the debtor protection law to ensure that debtors are treated fairly by creditors, according to a leading academic.

Associate Prof. Sangsit Piriyarangsan, who is also chairman of the National Legislative Assembly's Committee on Finance, Banking and Financial Institutions, said data released by the central bank showed household debt last year surged to Bt213.44 billion while household income totaled Bt 116.59 billion.

In the second quarter, outstanding credit card loans stood at Bt169 billion. Consumer loans extended by commercial banks increased by 18 per cent and those provided by non-bank financial institutions by 15 per cent.

Given the data, consumer debt increased sharply, he said, adding that operators of credit card and consumer loan businesses were now attempting to collect debts by different means, more forcefully and intrusively, which violate personal rights.

Worse still, BoT had imposed a minimum monthly installment payment for credit card debts at 10 per cent instead of 5 per cent set earlier.

He suggested the Finance Ministry and BoT instruct financial institutions to be strict for the issuance of credit cards to prevent customers from having too many cards.

In addition, they should consider whether credit card loan rates, which stay at 28 per cent at present, are appropriate or not.

The law governing debt protection should be amended to ensure prevailing fairness for debtors.

He viewed the ministry and BoT are indifferent to problems facing debtors at present despite the fact that the number of the debtors is as high as 5-10 million persons throughout Thailand.

woops, that's a serious stones into BoT's lawn! no wonder it makes appearance of caring about debtors - because someone somehow MUST get all those debt moneys back before it is too late. because Household debt is only growing, not reducing!

Thai Economy Set To Improve After General Election

Aug 4 2007

Voraphol Sokatiyanurak, vice chairman of the National Economic and Social Advisory Council, said the problem of poverty and indebtedness will be an immediate concern of any new government formed after the general election later this year. Consumer spending has slowed while household debt has doubled to Bt120,000 (US$3,640) from Bt60,000 (US$1,820) listed earlier, Mr. Voraphol said.

...

The new government must restructure both Thailand's system of income distribution system and the social structure, added Mr. Amphol.

but wait, here is the good news: those well-to-do will set an example of WISE SPENDING !

so, all the lesser folk will definitely stop borrowing moneys from banks and loan sharks, stop spending left and right for things they do not actually require and can't afford for their monthly wages.

sure, yeah! and as well palms will start growing in Antarctica, may be even much sooner!

Politicians Urged to Serve as Role Models

for Applying the Sufficiency Economy Philosophy

Sep 11 2007

gov PR Dep

Politicians and the elite in Thai society have been urged to serve as role models for applying the philosophy of Sufficiency Economy in leading their lives.

... politicians and members of high society hardly practice the philosophy of Sufficiency Economy. This feeling toward politicians and the elite might become an obstacle to the promotion of Sufficiency Economy, an innovative approach to development formulated by His Majesty the King. So both politicians and the elite should create better understanding about this concept among the people, in addition to acting as role models in translating it into action.

Most of the surveyed people, 88.8 percent, said that politicians and the upper class practice Sufficiency Economy at a very low level, while only 11.2 percent thought that they practice it at a high level.

Asked about major causes that have thrown Thailand into an economic crisis, most of the respondents pointed out unplanned spending, followed by extravagance, higher cost of living, increased prices of commodities (especially oil products), political instability, corruption, political division, and the lack of unity among the people.

I wonder, this ABAC poll - was it even attempted to be done among those very politicians and hi-so ? most probably not !

because who of them would willingly agree to reduce their spending and luxurious life style?

[JimmieBlonde]

I've borrowed from the "Loan Sharks" sometimes the only corse open to me, and I repayed on time, and was glad at least someone would lend to me.