DSI to propose a new law to protect debtors from interest overcharging by creditors

[webfact]

DSI to propose a new law to protect debtors from interest overcharging by creditors



BANGKOK: -- The Department of Special Investigation is to propose the Justice Ministry to revoke the outdated Interest Rate Act B.E. 2475 and to replace it with a new law which will seek tougher penalties against lenders who overcharge their borrowers.

DSI chief Mrs Suwana Suwanchutha said that the Interest Rate Act has been promulgated since 1932 and has never been amended or updated to keep abreast with changing circumstances and economic conditions which are complex and complicated.

She pointed out that the economic system which puts emphasis on competition to make unreasonable profits has opened up the opportunity for the creditors to exploit legal loopholes to take advantages on their debtors.

Because most debtors are not in a position to bargain with the creditors and also because of their lack of legal understanding, she said that most debtors would struggle or try all means to get the money to repay their debts or, in case of defaults, are forced to sell their houses to settle the debts.

The proposed law to replace the Interest Rate Act B.E, 2475 will seek higher penalties against creditors who overcharge their debtors above the maximum 15 percent interest rate – three years imprisonment and/or a fine of 300,000 baht or five years and/or 500,000 baht in case the creditors are organized instead of one year jailterm and/or 1,000 baht fine under the existing law , said the DSI chief.

She added that the proposed law will redefine interest to also cover fees and other service charges imposed by the creditors such as credit card and finance companies.

Source: http://englishnews.thaipbs.or.th/dsi-to-propose-a-new-law-to-protect-debtors-from-interest-overcharging-by-creditors

-- Thai PBS 2015-06-16

[JOC]

More air!!

In any telephone booth in Bangkok, there are at least 10 flyers offering black market loans.

If the powers were serious about protecting debtors, start tracing the people behind those flyers and shut them down!!

[smutcakes]

I thought 6 months or so back there was another law or regulation passed on this, perhaps relevant to lone sharks, where the maximum interest was far higher than this.

[ezzra]

What a stupid idea, you can't make money on a 15% interest a year, by the time you calculate

your cost of money, expenses and NPL's (non preforming loans ) CPI and general losses

in this game you'd be losing money on the 15%,even the UK and other first tire country

allow APL up to a 1,000 % .....

[CindyB]

I have a question re: the 15% maximum interest rate. Is it per day, per week, per month, per year? I hope the wording in the law is much more clear than the wording in the article. Our neighbor is paying the local loan shark 10 or 12% per month which, according to this article, could be quite legal.

[Shiver]

I was told a couple of years ago that the maximum legal rate was 6% per month (I'm sure there are lots that go beyond the legal rate though). No idea what the current rules are. I presume that is also backed up by the papers to the family farm for non performing loans.

[Srikcir]

Legitimate credit card and finance compannies, ie., BANKS, will object to the 15% limitation and the bill will never get to a vote in the NLA.