Stiffer anti loan shark law now effective

[webfact]

Stiffer anti loan shark law now effective

 

 

BANGKOK: -- Tougher anti loan shark law that imposes stiffer and severer penalties on loan sharks is now in force after it was announced in the Royal Gazette.

 

The new anti loan shark law was introduced to replace the old law which was enforced since 1932 or 80 years ago forbidding overcharging interest rates on lending.

 

Under the current situation, loan shark operation has brought about influential criminal networks under the guise of hire-purchase, quick cash loan now spreading widely on various websites. Such illegal activity is immoral and a threat to the peace and order of the country.

 

The new law will deal harshly with loan sharks who charge borrowers over 15% interest rate a year with penalties increased from a maximum one year imprisonment and a maximum fine of 1,000 baht to two years in prison and 200,000 baht fine at maximum.

 

Full story: http://englishnews.thaipbs.or.th/stiffer-anti-loan-shark-law-now-effective/

 

-- © Copyright Thai PBS 2017-01-16

[clockman]

Every village, has a loan shark. It is not going away. Usual mouthing off.!

[johng]

Law now in effect...how effective it will be ?

[trogers]

I believe loan sharking and money laundering are two sides of the same coin...

 

These laws are not severe enough!

[jaltsc]

"... law that imposes stiffer and severer penalties on loan sharks is now in force..."

 

There are stiff penalties for murder, breaking traffic laws, child abuse, etc. However, none of those crimes seem to be decreasing. Have all the laws you want. If they aren't enforced effectively and non arbitrarily, nothing will change. 

 

[greenchair]

So why is the bank permitted to charge 28 percent on credit cards, ??

[puukao]

I got a guy banging on my door now, i am paying 35% a day...

 

"Check online, I now pay less!!"  I tell him

 

One leg broken

 

"Only 15% per year."

 

Both legs broken.....

[FrankThai]

Considering the law today is completely not enforced, the concept of doubling the penalty means a law with more penalty also not enforced.

 

As a Thai policeman told me, "Thailand doesn't need more laws; it has plenty of laws.  It just needs the laws enforced."

 

The problem is not the law, it is the lack of enforcement of the law.

[maoro2013]

Please define accurately  'Loan Shark'.

[Srikcir]

17 hours ago, webfact said:

charge borrowers over 15% interest rate a year

That's a fair cut-off.

For example, Kasikorn highest rate for secured consumer lending rates is about 13% and for unsecured 18-23%.

http://www.kasikornbank.com/EN/RatesAndFees/Lending/Pages/Lending.aspx

 

 

[northernboy]

9 hours ago, greenchair said:

So why is the bank permitted to charge 28 percent on credit cards, ??

The truly rich, who own the banks are "friendly" with the powers to be and they ensure the rules are on their side not the smaller less profitable loan issuers. 

Was it not just months ago the government talked about making money lending by private lending easier and now they have raised the legal interest by a few point but well below bank's legal maximum rate.  Better not mention banks are allowed high penalties and charges, are the private lenders? . 

[Sydebolle]

"forbidding overcharging interest rates on lending". I had staff in employ who paid 4% a month to a Thai-Chinese loan shark on a B800'000 loan secured with a land title deed worth 15 fold. The paperwork included a pre-signed power of attorney and validated sales contract. Said staff member could not cough up the repayment in time and was late by two weeks. Contacting the loan shark the answer was simple - they had executed the paperwork and became owners of a B 12 million property by "lending" B800'000 for two years. 

Regretfully you can write it up for them, you can tell them but you cannot understand it for them. Once I heard about it, it was too late and I could not intervene more without risking being considered a "nuisance" to those unofficial bankers running - most likely - a bigger money business than the official, complicated, bureaucracy-ridden, inefficient commercial banks. 

If taught so on an education level one might see some light at the end of the tunnel but, like many other tunnel lights beware of the engine racing straight into your face 

[madmitch]

So the police are going to arrest themselves are they?

[realenglish1]

I really dont think they are after the local village loan shark so to speak

It is the knee crunching  mob guy they are targeting here 

[Rc2702]

These jumnum deals sound risky too.

 

Legally I hear you can go to your Amphur and write up a deal which ensures the lender gets your land should you fail to pay the required interest  (in the form of rice per crop)(eg) should you fail to pay the interest and cannot pay the money you lent in the 1st place. You lose your land/surety.

 

So what's to stop someone from sabotaging your crops, machinery etc to ensure you cannot pay?

[timewilltell]

What about the Sale with Right of Redemption method used by loan sharks to circumvent the law.  In my cases in a provincial Court the fact that the money lenders were charging illegal interest rates, front loading the interest and charges and buying the properties for greatly under market price held no weight at all.  It seems the method is a simple way around the intent of the law.  

[Dionigi]

Visa rate for cash appears to be about 23%

[DrTuner]

On 1/16/2017 at 3:27 PM, johng said:

Law now in effect...how effective it will be ?

Same as the other gazillion laws. Zero enforcement = zero effect.

[bokningar]

11 hours ago, maoro2013 said:

Please define accurately  'Loan Shark'.

Apparently according to the new  law some one that charges more than 15 % a year right?

[colinneil]

Anti loan shark law now in effect ok.

Many laws here in effect but never enforced.

Interesting to see the RTP arresting some of their own, as a lot of the loan sharks are high ranking police.

[maoro2013]

11 hours ago, bokningar said:

Apparently according to the new  law some one that charges more than 15 % a year right?

Once again, the government interfering with the market. The people borrowing from the loan sharks cannot obtain the finance otherwise. I guess from the loan shark's perspective these are high risk loans and extra interest is required.

[ALFREDO]

On 18/1/2560 at 7:29 AM, maoro2013 said:

Once again, the government interfering with the market. The people borrowing from the loan sharks cannot obtain the finance otherwise. I guess from the loan shark's perspective these are high risk loans and extra interest is required.

No no,

even with rightfully land papers and often Gold secured, the loan sharks charge high interest rates, no ,mercy.

its difficult to get a Bank loan - also with house - land papers if you are officially without steady monthly income - a trader or in agriculture business, a Farmer.

I know that from my own experience here in my Thai family.

Who lends money to 15 % interest in the year, is in high demand and I know a Chinese? family running a big Pharmacie in Sawang Den Din Sakhon Nakhon who have - I think a huge amount of money lent out - so many borrowers I see any time of day, day by day paying there their monthly interest.

 

[Bangel72]

Is there a helpline group/number dedicated to providing real support and maybe even a level of protection to those currently being extorted under these new rules?

Without this, the only target will be the companies who have registered as legal loaning companies who in the past would often overstep the legal rights of the borrowers.

We might end up with even more loans at the lower hidden end of the market,

Support groups, amnesties and new loan agreements is a lot of effort but potentially merited if anyone is serious about this.