Crackdown on loan sharking

Recently, many people have been discussing the case of Nguyen Ba T. in Quoc Tuan commune accepting a phone as collateral from Mr. NHH in Nam Sach town to lend 500,000 VND, taking an interest of 10,000 VND for 10 days. The interest is equivalent to 219%/year, violating the provisions of the Civil Code (the loan interest cannot exceed 100%/year). For the above violation, Nguyen Ba T. was fined 10 million VND by the Chairman of Nam Sach District People's Committee and forced to return 27,300 VND of illegally obtained interest.

Lending small amounts of money, even small amounts, for high interest rates like the above is not uncommon. Many people need money right away, while others have money available, so both parties agree to borrow at high interest rates, exceeding regulations. There are cases where both the lender and the borrower know the interest rate is illegal but still agree to borrow. There are also borrowers who do not know that paying high interest is against the law.

The situation of usury has been around for many years and is still evolving in a complicated manner with increasingly sophisticated tricks and methods. The Government's report submitted to the 6th Session of the 15th National Assembly recently showed that in 2023, many types of crimes continued to increase, including some types of crimes that increased sharply such as murder, robbery, fraud, and usury in civil transactions. In particular, the crime of usury in civil transactions increased by 67.85% compared to 2022.

According to the Ministry of Public Security, from the implementation of Directive No. 12/CT-TTg dated April 25, 2019 of the Prime Minister to mid-2022, the police force nationwide has prosecuted 1,038 cases with 2,025 subjects for the crime of usury in civil transactions and administratively handled 359 cases with 485 violators.

In Hai Duong, on May 31, 2023, the People's Court of Kim Thanh district sentenced Nguyen Van Ha (Tuan Viet commune) to 8 years in prison for lending money at high interest rates in civil transactions. For many years, Ha lent money to many people at interest rates of 3,000 - 5,000 VND/million VND/day, 5.4 - 9.1 times higher than the highest interest rate prescribed in the Civil Code, illegally profiting nearly 1.4 billion VND.

According to the report of the Provincial People's Court, from October 1, 2020 to September 30, 2022, the two-level courts in the province accepted 17 cases with 34 defendants for the crime of usury, an increase of 11 cases and 26 defendants compared to the same period last year.

To deal with the authorities, loan sharks have stepped up online lending (via App). A variation of this crime is the establishment of businesses that lend money to banks at very high interest rates and simple loan procedures. It is very difficult to crack down on the crime because the subjects use high technology, junk SIM cards, fake social network accounts...

Loan sharking has caused trouble for many families and disrupted social security.

Preventing and repelling the crime of loan sharking in civil transactions is urgent, contributing to a healthy society and ensuring security and order. Every citizen needs to be vigilant when seeking money sources of the nature of "black credit" to avoid falling into traps.

Localities, agencies and units need to properly implement Directive No. 12/CT-TTg dated April 25, 2019 of the Prime Minister on strengthening the prevention and fight against crimes and violations of the law related to "black credit" activities. Strengthen propaganda, dissemination and education of laws on lending in civil transactions. The police force has stepped up the suppression of this crime. The state banking system has widely propagated and disseminated legal documents on banking credit mechanisms and policies, preferential loan packages and amounts; has policies to expand types of loans, banking products and services, etc.

Currently, the penalty for the crime of usury in civil transactions is not really deterrent enough. This is a shortcoming of the 2015 Penal Code (amended and supplemented in 2017).