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Monday, July 19, 2021

51 Arrested After Chinese Operated Illegal Loan Firm is Shut Down in Bangkok

The loans charged a fee and interest rate that was upwards of 50%

When: February 3rd, 2021

Where: Wang Thonglang district, Bangkok

Perpetrators: 4 Chinese owners; 46 Thais; 1 Signaporean

Victims: Those needing high-interest loans

What: On the evening of February 3rd, 2021, police in Bangkok raided a an office that was home to an illegal loan firm. Police arrested 46 Thai employees, 1 Singaporean IT person, and 4 Chinese owners. Authorities seized laptops, documents, and other evidence at the scene.

Police acted after receiving many complaints from people who borrowed funds in excess of the legal loan interest rate through an app. The loans ranged between 2,000 and 50,000 baht with a repayment period of 7 days.

As an example, if a loan was 2,000 the customer would get 1,200 (service fee of 800 baht), plus interest of 12 to 14%.

The app is called “speedwallet” and was available for download on smartphones. The firm would gather the Line ID and other contact info from the borrower in the process.

If the loan plus interest was not paid on time, they would be threatened and their case would be passed on to a third party known to the borrower and who would “humiliate the borrower.”

The firm had recently moved offices 2 weeks ago after being investigated at a previous office. There were both male and female Thai employees at the office with HR, admin, debt collector, and coordinator roles.

Police said there is a group of informal loan operations who are being funded by foreign investors looking to take advantage of those who are facing economic hardship. Modern technology allows these firms to reach a large number of people easily and cause widespread damage.

Eight apps like “speedwallet” have been found with a total customer list of 5,000.

The report does indicate that those arrested may face charges related to charging interest in excessive rates, which can end in a prison term not exceeding two years and a fine not exceeding 200,000 baht.

A spokesperson from the Royal Thai Police’s Immigration office said that they are looking at ways to suppress this activity from foreign investors, including doing better background checks.

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My take: We’ve ran a few of these types of stories and they pop up fairly regularly.

Usually it’s a Chinese operation.

Some might argue that if somebody agrees to a loan’s terms then it is their choice. The problem with that is if the loan’s interest rate is higher than the legal rate.

The math on these loans is horrible, where the borrower ends up paying nearly 50% in fees and interest.

Anybody who would take a loan like this is likely very desperate and has no other option, or uneducated about basic personal finances, or a combo of both. Either way, it’s exploiting people — especially in a time like this when the economy’s teetering on the cliff’s edge.

Source: https://www.dailynews.co.th/crime/823184

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