Gold Shop Loans

[Kf6vci]

To raise cash, gold was taken to a gold shop by an old widow. For years, she only paid the interest. Then it turns out that her son in his 50s (some official job) stole the interest payments for about 6 months.

The gold belongs to a daughter.

Recently, the brother talked the gold shop into lending him some THB 15,000 on his mother's collateral. But this gave him the idea to make even more by getting a loan, then pay off the balance, grab the gold and sell it.

Instant profit amounting to months' salary.

turns out he has been acting like this all his life.

He only has sisters and he started at a young age.

Q: Are gold shops not regulated?

His old mother will just be defeatist like every body in that family.

Q: Would this be a civil or a criminal matter?

Q: any advice on dealing with such a person? It is clear that his hunger for money is unlimited and one can only fear what he will do next to get at other people's money.

Q: Shun him? but do nothing about this latest incident?

[johna]

To raise cash, gold was taken to a gold shop by an old widow. For years, she only paid the interest. Then it turns out that her son in his 50s (some official job) stole the interest payments for about 6 months.

The gold belongs to a daughter.

Recently, the brother talked the gold shop into lending him some THB 15,000 on his mother's collateral.

I don't understand this,

The collateral was the gold held by the shop for a loan made to the mother,

No interest is paid for 6 months,

So why would the gold shop increase the size of their original loan by 15.000 ?

But this gave him the idea to make even more by getting a loan, then pay off the balance, grab the gold and sell it.

So he gets a loan from who, with no collateral, pays the gold shop, redeems the gold and sells it, is that right ? sounds complicated.

[LivinLOS]

So why would the gold shop increase the size of their original loan by 15.000 ?

Well the price of gold is up some 300% in 5 years...

Also very often Thais borrow what they need not the full possible loan amount.. So they leave a 5 baht piece but only borrow 20k instead of the full 50k (more but you get the idea) that they could.. Hence theres more money there should a second loan be desired.

I would say in the above case.. If someone was paying the interest, and he had the 'payment card' and he handled the dealings at the shop.. and he borrowed more money. The issue is not with the shop at all, its with the brother who did the deed. The shop isnt in any way at fault here as they simply dealt with who they normally deal with over the matter.

All in all I have been very impressed by the low interest rates charged and the professionalism of the gold shops. In a society that doesnt / didnt have much banking system I think they offered a pretty good alternative banking service.

[sweetchariot]

I don't get it either. Why would they lend more when he didn't pay the interest for 6 months.

As to the question of regulation, I don't know whether to laugh or cry. Regulated? Thailand? Isn't that what they call an oxymoron?

[Heng]

Sounds like the gold shop has little to do with any of this. No gold shop will just increase your loan based on character. There has to be more collateral put down first. More likely whoever is telling you this story is making some of this up.

[LivinLOS]

Dont forget that by legally going after the gold shop, the family will have to pin the blame on the brother.

The reason you are faced with apathy is because they wont punish the son simply to get thier money back. Its not like the money left the family and was stolen, just transfered between siblings / parents / etc. I suspect that the only reason your involved is the connection to the now wronged 'Daughter' however the family probably see she doesnt need it as shes connected to the farang gold mine. The brother was just claiming his stake.

[LivinLOS]

Sounds like the gold shop has little to do with any of this. No gold shop will just increase your loan based on character. There has to be more collateral put down first. More likely whoever is telling you this story is making some of this up.

No but they will increase a loan based on having the collateral raise in value or if there was extra collateral left.

[johna]

Gold shops, Pawn shops operate the same?

You don't make interest payments you loose the collateral; I'm told (by my better half) that pawn shops keep the collateral if you fail to pay interest for 3 months.

This is a business transaction, why the gold shop should increase the loan based on a rise in value of the collateral and, in view of the fact that no interest had been paid for 6 months doe's not sound like good business.

Keeping the collateral based on non payment of interest sounds more in the nature of this type of business.

[Kf6vci]

To raise cash, gold was taken to a gold shop by an old widow. For years, she only paid the interest. Then it turns out that her son in his 50s (some official job) stole the interest payments for about 6 months.

The gold belongs to a daughter.

Recently, the brother talked the gold shop into lending him some THB 15,000 on his mother's collateral.

I don't understand this,

The collateral was the gold held by the shop for a loan made to the mother,

No interest is paid for 6 months,

So why would the gold shop increase the size of their original loan by 15.000 ? The brother went to the shop and asked them to give him 15,000 and to add to somebody else's loan. this is utterly o u t r a g e o u s.

But this gave him the idea to make even more by getting a loan, then pay off the balance, grab the gold and sell it.

So he gets a loan from who, with no collateral, pays the gold shop, redeems the gold and sells it, is that right ? sounds complicated.

Apologies, we have the case that someone is riding piggyback on someone else's loan. Syphoning off a bit and then taking it all.

[Kf6vci]

I don't get it either. Why would they lend more when he didn't pay the interest for 6 months.

As to the question of regulation, I don't know whether to laugh or cry. Regulated? Thailand? Isn't that what they call an oxymoron?

Well, the gold shop knew the collateral was owned by the old mother. She has the paperwork and she has been paying like clockwork over the years (except when her son opten to embezzle payments she made).

Since the collateral exceeded the loan value, due to repayment of principal, the brother first seized the chance and he talked the gold shop to give him money which his mother would have to repay! then, he got a company loan, paid off the balance and grabbed the gold as collateral.

Try ordering a pizza and say "my mother will pay it one day".

There is a fundamental problem with ownership and due dilligence by that gold shop. The customer is an old LADY, not some MAN.

''''''''''''''

I will follow up on how this will be handled by the family. For decades, the ruthless son has always taken what he wanted and gotten away with it.

******

The ability to borrow is very important to the elderly, as no bank would deal with them. And gold shops do not charge 5% a month as this old lady (mother) also borrowed at this rate from a neighbor with a rice field as collateral.

[roygsd]

There is a fundamental problem with ownership and due dilligence by that gold shop. The customer is an old LADY, not some MAN.

''''''''''''''

I will follow up on how this will be handled by the family. For decades, the ruthless son has always taken what he wanted and gotten away with it.

******

Hi,

The "fundamental problem" that you seem to be ignoring is staring you in the face.

The daughter ( presumably your wife?) knew quite well when she "loaned" the gold to mama it was unlikely to be returned, I suspect that the reason the gold as loaned in the first place is because the daughter and her farang would not provide the money that was asked for in the first place.

You are not the first and you are not going to be the last farang to suffer this problem, the script changes from time to time bt the ending is always the same.

I know its no consolation to you but you are luckier than most, they have loaned the gold to mama AND paid the monthly repayments for lengthy periods and the truth of the matter is unless the farang and daughter paid off the outstanding balance

the gold was staying in the shop.

I would go futher to say that if the daughter and her farang did send the cash to get the gold out of the shop it would remain with mama and I have no doubt that at some point in the future it would end up in the gold shop and I hav eknown a few farangs that have again paid the new loan off rather than see the wife lose the gifts he provided her with.

Their wives never asked mama for their gold back, the face thing comes into play its lke saying you dont trust mama to keep her daughters property safe, and yes at a later date when money was again asked for the farangs refused to provide it so the daughter agreed ( not that she had any choice) to her gold being used as security for a loan once more.

Farang refused to make the payments this time, ( having already bought it for her and paid a similar sum again in loan repayments who can blame the farang?) farangs wfe insists mama will make the payments then desparate messages gold shop want to cancel loan need to repay entire loan to get gold back or loose it, tears from farangs wife, anger, not money from from farang, gold never spoken of again.

Think carefully whay you have sid in your post, mama didnt make the repayments for 6 months, no gold shop would allow that to happen, the gold would have automaticallly become the property of the gold shop well before then.

No daughter is going to tell a farang her mother has sold the gold he likely bought her, if she did she knows further help for mama from farang may disappear.

I would not be suprised if all the family except for the farang knows the real story, and none of them are going to run the risk of giving the farang a good reason for refusing to help the family in the future.

The son may be a shit, but mama is the start and finish of the problem.

Any guy out there better understand when the wife tells him she wants to send her jewellery to mama to use as security, she is really asking you to say no I will send the cash instead. No thai lady wants to loose her gold but if the farang dont provide the money the daughter will part with her gold to mama.

If I am entirely wrong and you hav ebeen told the truth ( ) then my response is as follows:

The ruthless son has always taken what he wantes and gotten away with it, and more importantly will continue to do so until the "victim" complains to the Police.

Mama has never done it before and I supect she will never do it in the future, as you say the gold belongs to the daughter ( possibly your wife?) then as she has been deprived on the property she loaned her mother then the only recourse available to her if she wants to recover her property is to take legal action against her mother.

If it ever came to court (and hel_l will freeze over first!) then the mother would have two choices, take the blame herself or blame the son, it isnt going to happen.

Th only person who can take legal action against the gold shop is the person they had the conract with which as you ay is the mother, I dont know if you have noticed but policemen or their families seem to be involved in the running of these goldshops which is another problem.

As the gold shops offer the cheapest loans then she may need their help in the future so the whole thing is going nowhere.

Anyway they dont consider it a problem, the farang can replace it for the daughter if he wishes.

I havent bought gold for my wife for years.......... and dont intend to in the future.

Roy gsd

[Heng]

Sounds like the gold shop has little to do with any of this. No gold shop will just increase your loan based on character. There has to be more collateral put down first. More likely whoever is telling you this story is making some of this up.

No but they will increase a loan based on having the collateral raise in value or if there was extra collateral left.

No, that's not standard operating procedure. They'd have to pay the original loan (the loan ticket is a legal document and can't just be changed because the market value changes) and then create a new loan account at the new value. Same result basically though, although in that scenario the "brother" would have had funds to pay off the first loan (which doesn't sound likely).