Phuket Police Crack Down On Loan Sharks

[webfact]

Phuket Police crack down on loan sharks

IN THE RED: The four suspects were all male.

The young woman shown to their right was arrested on an unrelated charge.

PHUKET CITY: Police are cracking down on loan sharks who offer desperate people high interest loans, sometimes backed up with the threat of violence against those who fail to pay back their debts.

Four men are accused of offering loans with interest above the legally permissible rates.

They were paraded before a press conference at Phuket City Police Station yesterday.

Phuket Provincial Police Commander Pekad Tantipong said police are also looking for another group of loan sharks who recently put a number of debtors in Vachira Phuket Hospital after they failed to meet their repayments.

All four suspect were picked up at Ban Koh Kaew police checkpoint on Monday and Tuesday.

Police identified the four as follows:

Pattanachat Kayasit, 33, from Chantaburi, arrested in possession of a list of debtors, 50 phone cards and 150 baht in cash;

Danai Labliem, 41, from Surat Thani, arrested in possession of a list of debtors, two mobile phones and name cards advertising loan services;

Natthapon Mungtorkij, age unknown, from Rayong;

Sakda Pannark, age unknown, arrested in possession of 3,000 baht and name cards advertising loan services.

Gen Pekad said the men were charging interest rates of 30 percent per month.

All four suspects confessed to charges of usury.

Back in June, Chalong Police arrested a gang of loan sharks extracting money from Rawai's sea gypsy community.

Pol Maj Jaran Bangprisarit of Chalong Police said at the time that he believed there were an estimated 40 loan shark gangs operating in Phuket.

Advertisements for loan services are a common sight in Phuket, where they are commonly pasted onto telephone booths and utility poles.

-- Phuket Gazette 2009/11/04

[surangw]

Phuket Police crack down on loan sharks

IN THE RED: The four suspects were all male.

The young woman shown to their right was arrested on an unrelated charge.

PHUKET CITY: Police are cracking down on loan sharks who offer desperate people high interest loans, sometimes backed up with the threat of violence against those who fail to pay back their debts.

Four men are accused of offering loans with interest above the legally permissible rates.

They were paraded before a press conference at Phuket City Police Station yesterday.

Phuket Provincial Police Commander Pekad Tantipong said police are also looking for another group of loan sharks who recently put a number of debtors in Vachira Phuket Hospital after they failed to meet their repayments.

All four suspect were picked up at Ban Koh Kaew police checkpoint on Monday and Tuesday.

Police identified the four as follows:

Pattanachat Kayasit, 33, from Chantaburi, arrested in possession of a list of debtors, 50 phone cards and 150 baht in cash;

Danai Labliem, 41, from Surat Thani, arrested in possession of a list of debtors, two mobile phones and name cards advertising loan services;

Natthapon Mungtorkij, age unknown, from Rayong;

Sakda Pannark, age unknown, arrested in possession of 3,000 baht and name cards advertising loan services.

Gen Pekad said the men were charging interest rates of 30 percent per month.

All four suspects confessed to charges of usury.

Back in June, Chalong Police arrested a gang of loan sharks extracting money from Rawai's sea gypsy community.

Pol Maj Jaran Bangprisarit of Chalong Police said at the time that he believed there were an estimated 40 loan shark gangs operating in Phuket.

Advertisements for loan services are a common sight in Phuket, where they are commonly pasted onto telephone booths and utility poles.

-- Phuket Gazette 2009/11/04

without private lenders ( loan sharks) the low income thais will be in a bind.

stopping a few won't make a difference ( IMHO)

[kalbo123]

what a catch...

3000 baht..

[Bagwan]

Maybe the BiB moneylenders want to eliminate the competition.

I was told in all seriousness by a person in authority (hence no name, no pack drill), who is in a position to know, that if anybody has trouble meeting the financial requirements of renewing their visa, then speaking nicely to Immigration police might well lead to them lending you the amount of the shortfall.

My informant added that the rate of interest might well raise eyebrows.

[JUDAS]

What is the maximum legal loan rate?

[TAWP]

without private lenders ( loan sharks) the low income thais will be in a bind.

stopping a few won't make a difference ( IMHO)

Nonsense, these loan-sharks operate with the intent that the rate is high to make sure people pay off the value of the monthly rate only and the debt stays the same or rise.

Anyone that cannot get a loan from a bank cannot afford to take a loan from loan-sharks! It's the nature of the game.

[hkt83100]

What is the maximum legal loan rate?

As far as I was told 15% p.a.

[surangw]

without private lenders ( loan sharks) the low income thais will be in a bind.

stopping a few won't make a difference ( IMHO)

Nonsense, these loan-sharks operate with the intent that the rate is high to make sure people pay off the value of the monthly rate only and the debt stays the same or rise.

Anyone that cannot get a loan from a bank cannot afford to take a loan from loan-sharks! It's the nature of the game.

Twap

I disagree, most of the loans are small amounts that a bank would not bother with.

someone gets in a bind for money, getting some money fast is the only choice.

[Steve2UK]

What is the maximum legal loan rate?

As far as I was told 15% p.a.

I'm told by a Thai friend who's in the business that it's actually officially 3% - but also that there are so many wrinkles and conditions that can be brought into play to make effective higher rates "legal" that this figure is pretty well meaningless. Not to mention the usual factor of payments to BiB etc so that higher rates will be "OK"; as usual, I assume that these Phuket "culprits" were mainly guilty of neglecting that aspect of their business arrangements.

I basically agree with surangw's comment and disagree with TAWP if he's suggesting that all the unofficial lenders are simply of the "loan shark" variety. From what I understand many of the gold shops are in the business of money-lending (as well as many neighbourhood phu yai) - and there's simply too much competition in the business for it to work like that as universally as he suggests. Likewise, many Thai - while they may have some kind of bank account - are just not into/equipped for lining up collateral for bank loans.......... too much hassle and paperwork compared to dealing with the neighbourhood moneylenders for a short-term loan.

[TAWP]

Both your replies run into what I am saying. People taking short-term loans are in most regards not the kind that should be borrowing money from anyone.

A nice niche to sell in, if you have the baseball bats at hands.

[apetley]

There are a couple of loan sharks lend money locally.

People borrow as little as 100 bht and pay back 120 bht the next day!

What rate a year does that work out as?

[mca]

Phuket Provincial Police Commander Pekad Tantipong said police are also looking for another group of loan sharks who recently put a number of debtors in Vachira Phuket Hospital after they failed to meet their repayments.

All four suspects were picked up at Ban Koh Kaew police checkpoint on Monday and Tuesday.

When they came on duty.

[Steve2UK]

What is the maximum legal loan rate?

As far as I was told 15% p.a.

I'm told by a Thai friend who's in the business that it's actually officially 3% - but also that there are so many wrinkles and conditions that can be brought into play to make effective higher rates "legal" that this figure is pretty well meaningless. Not to mention the usual factor of payments to BiB etc so that higher rates will be "OK"; as usual, I assume that these Phuket "culprits" were mainly guilty of neglecting that aspect of their business arrangements.

I basically agree with surangw's comment and disagree with TAWP if he's suggesting that all the unofficial lenders are simply of the "loan shark" variety. From what I understand many of the gold shops are in the business of money-lending (as well as many neighbourhood phu yai) - and there's simply too much competition in the business for it to work like that as universally as he suggests. Likewise, many Thai - while they may have some kind of bank account - are just not into/equipped for lining up collateral for bank loans.......... too much hassle and paperwork compared to dealing with the neighbourhood moneylenders for a short-term loan.

An update (with apologies for my earlier inaccuracy). Seeing today's Bangkok Post article (similar in The Nation, I think) about government action on private lending (i.e. the loan shark style of business) referring to an accepted maximum of 15% per annum, I quizzed the Thai friend again and he now explains that the 3% figure he gave me previously was per month. How that can work out to 15% p.a. is beyond my understanding - but I'm only the son of an accountant and not one myself.......

While I'm here, I'll take the opportunity to respond to TAWP's later post. While I agree in principle with the general sentiment of "People taking short-term loans are in most regards not the kind that should be borrowing money from anyone", in practice there are many for whom "must" trumps "shouldn't" when they absolutely need the money but simply haven't got it. While I'm sure there are many wrinkles yet to be ironed out, the new scheme announced by the government is at least a good start and should help to deal with some of the excesses - usually from long-term loans at rates that compound ruinously. That said, as I know from more than just my present neighbourhood, there are moderate and accepted versions of the private lending business (usually very short-term loans) that have nothing whatever to do with baseball bats and the like. Yes, it's "A nice niche to sell in" (and highly profitable for the lender) - but that niche is people with short-term but urgent financial needs to be met. Is the recommended alternative to just say "tough"?

[ryladie99]

Phuket Police crack down on loan sharks

IN THE RED: The four suspects were all male.

The young woman shown to their right was arrested on an unrelated charge.

PHUKET CITY: Police are cracking down on loan sharks who offer desperate people high interest loans, sometimes backed up with the threat of violence against those who fail to pay back their debts.

Four men are accused of offering loans with interest above the legally permissible rates.

They were paraded before a press conference at Phuket City Police Station yesterday.

Phuket Provincial Police Commander Pekad Tantipong said police are also looking for another group of loan sharks who recently put a number of debtors in Vachira Phuket Hospital after they failed to meet their repayments.

All four suspect were picked up at Ban Koh Kaew police checkpoint on Monday and Tuesday.

Police identified the four as follows:

Pattanachat Kayasit, 33, from Chantaburi, arrested in possession of a list of debtors, 50 phone cards and 150 baht in cash;

Danai Labliem, 41, from Surat Thani, arrested in possession of a list of debtors, two mobile phones and name cards advertising loan services;

Natthapon Mungtorkij, age unknown, from Rayong;

Sakda Pannark, age unknown, arrested in possession of 3,000 baht and name cards advertising loan services.

Gen Pekad said the men were charging interest rates of 30 percent per month.

All four suspects confessed to charges of usury.

Back in June, Chalong Police arrested a gang of loan sharks extracting money from Rawai's sea gypsy community.

Pol Maj Jaran Bangprisarit of Chalong Police said at the time that he believed there were an estimated 40 loan shark gangs operating in Phuket.

Advertisements for loan services are a common sight in Phuket, where they are commonly pasted onto telephone booths and utility poles.

-- Phuket Gazette 2009/11/04

without private lenders ( loan sharks) the low income thais will be in a bind.

stopping a few won't make a difference ( IMHO)

Thanks for sharing, this is a price of being poor. The crooks always knows the way around and please to everyone reports any suspect of loan sharks. If our Farangs help the local, I am sure economy will be better off. 30% is so much money for the Thais..help and report, please make the difference and we all can reduce crimes against Farangs and Poor Thais...my opinion...

[mario299]

What is the maximum legal loan rate?

As far as I was told 15% p.a.

In the interest of accuracy only, from a very informed source....money loaned in the rural areas (Issan i.g.) yields 2% per month on the balance owed and generally borrowed to pay back the "rice bank" for monies previously borrowed, to enable future borrowing capabilities.

Money borrowed in Bangkok, Samut Prakan, etc yields 10% per month on the balance, and certainly doesn't require baseball bat ownership, just the borrowers ATM card for payday payment.

This fyi only, no idea how I know this.

I'm told by a Thai friend who's in the business that it's actually officially 3% - but also that there are so many wrinkles and conditions that can be brought into play to make effective higher rates "legal" that this figure is pretty well meaningless. Not to mention the usual factor of payments to BiB etc so that higher rates will be "OK"; as usual, I assume that these Phuket "culprits" were mainly guilty of neglecting that aspect of their business arrangements.

I basically agree with surangw's comment and disagree with TAWP if he's suggesting that all the unofficial lenders are simply of the "loan shark" variety. From what I understand many of the gold shops are in the business of money-lending (as well as many neighbourhood phu yai) - and there's simply too much competition in the business for it to work like that as universally as he suggests. Likewise, many Thai - while they may have some kind of bank account - are just not into/equipped for lining up collateral for bank loans.......... too much hassle and paperwork compared to dealing with the neighbourhood moneylenders for a short-term loan.

An update (with apologies for my earlier inaccuracy). Seeing today's Bangkok Post article (similar in The Nation, I think) about government action on private lending (i.e. the loan shark style of business) referring to an accepted maximum of 15% per annum, I quizzed the Thai friend again and he now explains that the 3% figure he gave me previously was per month. How that can work out to 15% p.a. is beyond my understanding - but I'm only the son of an accountant and not one myself.......

While I'm here, I'll take the opportunity to respond to TAWP's later post. While I agree in principle with the general sentiment of "People taking short-term loans are in most regards not the kind that should be borrowing money from anyone", in practice there are many for whom "must" trumps "shouldn't" when they absolutely need the money but simply haven't got it. While I'm sure there are many wrinkles yet to be ironed out, the new scheme announced by the government is at least a good start and should help to deal with some of the excesses - usually from long-term loans at rates that compound ruinously. That said, as I know from more than just my present neighbourhood, there are moderate and accepted versions of the private lending business (usually very short-term loans) that have nothing whatever to do with baseball bats and the like. Yes, it's "A nice niche to sell in" (and highly profitable for the lender) - but that niche is people with short-term but urgent financial needs to be met. Is the recommended alternative to just say "tough"?