Many loan providers have turned to hiring underworld gangsters to collect on debts rather than going the lawful route and submitting their cases to the courts.
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| To collect VND1.1 billion (USD55,000), Trang went to gangsters for help |
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| A gang of debt collectors captured by the police in Binh Tan District, Ho Chi Minh City, in March 2010 |
Lenders realise that it will take more time to complete the complicated legal procedures and fear that they will not receive satisfactory results.
Collecting debt payments by force
Transferring VND1.1 billion (USD55,000) for a partner company to import electric cables, Le Thi Thuy Trang, a 35-year old businessman, was astonished that the company, whose director is Dang Thanh T., had closed down and was unable to pay its debts. As a result, Trang’s firm had not yet received the goods.
After finding out traces of the partner, Trang hired a gangster, led by Le Hoai Sang, aiming to force Mr. T to return the money to Trang’s company.
After tracking Mr. T down on Nguyen Van Linh Street, Binh Chanh District, the gangster overpowered him and took him to a hotel in District 10. Here, the gang members physically harassed T until he called his family to bring VND1.1 billion. While collecting the money, the kidnappers were seized by police.
Hiring gangsters for debt payments has become a disturbing social trend. Another case was that of Nguyen Van Hung or Hung “Trang” and 30 gang members in Hai Phong City. They took weapons to collect on a debt owed to Le Trong Nam in Binh Thanh District, Ho Chi Minh City.
The contract between Hung “Trang” and Nam was signed in June. Under the contract, Nam asked the gang to get back the VND3.5 billion (USD175,000) from debtor H.V.N in Tan Phu District. After capturing Mr. N, the gang members used electric rods and their fists to force him to write a paper certifying the total debts climbing up to VND5.5 billion (USD275,000). Hung “Trang” threatened that if N did not pay the debt quickly, all members of his family had bullets waiting for them.
The police seized a gun and seven bullets after capturing Hung “Trang” and several other gang members.
For lenders, sometimes the legal way is the risky way
According to an inspection cadre, most creditors said that their debtors do not make payments on time. After failing to apply many methods, they decide to go the gangster route as a last solution.
Lenders must accept the payment of very high and exorbitant fees for debt collectors. In many cases, the debtor not only is unwilling to make the payment, but also challenges the creditor to send the case to the court.
Due to this attitude, the lender is ready to hire gangs. The inspection cadre noted that debt collecting service in Ho Chi Minh City is very complicated. Many gangs use tricks to reach their goal regardless of the law.
Lawyer Nguyen Xuan Chung, from the Ho Chi Minh City Bar Association, explained that there are many reasons that the creditor hires gangs for debt payment collection and do not believe in the ability of the court to resolve the issues. For instance, the court has to handle a case of debt payment demand within five days of receiving the lender’s petition. However, the settlement can take up from one to two years.
Lawyer Chung also added that, “In many circumstances, the creditor sends the petition to the court and pays all the fees. Nevertheless, due to complicated and cumbersome procedures and particularly getting unsatisfactory results after the trial, the lender withdraws the petition and decides not to trust the court.”