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Illegal credit "online" is showing signs of growing. Photo: ST

Deep into the "spiral" of debt

Recently, although there have been many warnings about traditional forms of black credit and via technology applications, there are still many people getting "trapped", causing themselves and their families to fall into a spiral of debt. Talking to reporters, a victim in Ha Tinh said that, in April 2020, due to financial difficulties, he was unemployed, so this person registered to borrow through the application "Borrowing lightning".

After completing some procedures, this person was notified of a successful loan of VND2.9 million in 7 days, however, the real amount that the app deposited into the borrower's account was only VND1.7 million after the transaction, operation and payment costs.

This person was 3 days late for the payment deadline and was contacted by the debt collection department of the application, informed that the amount of debt has reached VND5 million, including principal, interest and fines. When the borrower said they could not pay the debt immediately, this department sent someone to harass their relatives, with insults and threats.

Before such debt collection acts, this person has borrowed a number of other apps to pay off the debt. So far, from the original VND2.9 million loan to the debt number VND50 million across five different loan applications.

Debt is increasingly difficult to pay, but relatives, friends, acquaintances in the phone book have been constantly harassed by debt collectors, even posting false information on social networks.

The situation of both relatives and acquaintances as above is that when applying for a loan, the borrower must accept the terms of syncing their phone contacts and social networks with the application. Therefore, when the borrower fails to repay the loan, the borrower will be threatened with pressure by the lenders.

The fact that people still borrowing through the app is due to the convenience and speed of transactions. Borrowers do not have to go anywhere; do not have to prove their assets and income to also borrow money. Moreover, most of the loan amounts are very small, the borrower predicts their ability to repay, so they have access to some illegal credit loan applications. However, when taking a loan, the deduction of fees as well as high interest rateshas made many people unable to pay it back in time.

Like Mr. T. (residing in Bac Ninh province), he borrowed through the app with the amount of VND1.6 million, termed for7 days, but the actual amount he received was only VND1 million. After 7 days, he must pay VND1.6 million. So, with the real loan of VND1 million, he has to pay an interest rate of nearly 8.6% / day, equivalent to over 3,000% / year.

Lieutenant Colonel Ngo Hong Vuong, Head of the Criminal Justice Department, Criminal Police Department (Ministry of Public Security), said that the interest rate in illegal credit is usually very high, sometimes up to 300-700% / year.

Even some models of online lending are up to 1,400% / year, 700 times higher than the regulations.

In particular, nowadays, onlineillegal credit is showing signs of booming.

The tricks of Vietnam's illegal credit are distributing, posting leaflets, setting up websites, using social networks, mobile phone applications and posting advertisements for loans without meeting, no need for mortgage, simple procedure with loan amount from VND1 million to several tens of millions.

Sanctions are not strict

On Google, just typing the keyword "quickly borrow money" will produce 69,000 results in a second, bringing the searcher to the official and unorthodox websites, with attractive commitments such as quick loans, large loans,low interest rates, just verify information online.

Although illegal loan applications or websites were destroyed and warned by the police, these applications are constantly growing with a huge demand for borrowing from people.

The two most characteristic features of illegal credit are the extremely high lending interest rate and the debt recovery behavior.

In fact, everyone understands the consequences of this, but with supply, there must be demand, so these applications and websites have a lot of customers.

Moreover, Lieutenant Colonel Ngo Hong Vuong said that, in order to evade the police's investigation and collect evidence, in the loan documents, these subjects often recorded interest rates much lower than real loans the borrower has to pay. However, the borrower has to write on the loan paper, the interest payable is hundreds of times higher than that specified in Article 468 of the Civil Code, where the highest interest rate ceiling is 20%.

Furthermore, the lending activity through the app is an implicit transaction, the agreement between the debtor and the creditor is not authenticated. Most apps have a "boss" behind them. When the borrower is late in repayment or insolvency, the "owners" allow debt collection through the "rental collection force", thereby creating illegal acts such as threats, theft of property, or the idea of ​​causing injury, arresting people.

According to experts, in fact the app is just a means for people with money and people who need money to transact and there is no regulation prohibiting personal-to-personal transactions. However, according to regulations, a credit institution must have a number of conditions such as the approval of the State Bank, the minimum amount of capital, lending method.

Therefore, it is important that a legal basis for black credit management needs more updates, especially related to technology.

From the above issues, in order to avoid the "trap" of black credit, the representative of the Ministry of Public Security recommends that when borrowing money, people need to carefully study the lending regulations of the apps, choose a reputable loan app for credit and comply with regulations on interest rates (below 20% / year), and do not collect debt in violent ways.

Deputy Governor of the State Bank Dao Minh Tu also said that the banking sector has proactively implemented many solutions to expand credit to serve production and business and living needs of people and businesses, contributing to the Ministry of Public Security fighting, preventing and repelling black credit. In fact, bank loan procedures are very simple and easy, with low interest rates if people have a need to borrow capital for legitimate consumption, production and business needs.

However, in order to contribute to limiting black credit, especially in rural areas, besides the banking sector actively providing credit, the State Bank leaders said that it is necessary to have the synchronous participation of ministries, branches, local authorities, socio-political organizations to strive to raise awareness of people about black credit, and put in place sanctions that are capable of deterring participants.