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Social distancing violation busts Pattaya illegal loan scheme

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PHOTO: The illegal loan service was lending up to 3 million baht a day. (via Wikimedia)

Covid-19 safety violations brought down a Chinese man and 39 Thai employees running an illegal loan operation in Pattaya. The group was arrested for offering money lending services after violating the Chon Buri Disease Control orders and emergency decree restrictions of social distancing and large gatherings. Chon Buri police raided the office building in Nongprue on Pattaya Second Road and uncovered the unlicensed loan business, leading to 40 arrests.

Each staff member’s work electronic devices were impounded and taken to the Pattaya City Police Station, with police taking in 39 mobile phones and 39 laptops along with paperwork and business documents about the operation. Wang Pei, a 33 year old Chinese man, was arrested and claimed to be a manager working for a man in China identified only as Chern for a salary of about 48,000 baht a month. His 39 Thai staff were paid 10,000 to 12,000 a month each.

According to The Pattaya News, the illegal loan scheme appeared to be calling over 100 people a day, apparently targeting people with financial problems stemming from the Covid-19 pandemic, offering cash loans. Those who are interested were added via the Line app and sent through the loan application process. They were charged 2.57% interest, higher than the legal limit, and given a short repayment period. Those who didn’t pay would be harassed by the loan service calling contacts in the borrower’s phonebook like friends, family, and bosses.

The illegal loan service was lending out about 3 million baht a day, transferred from a Chinese bank account directly to each customer. Wang Pei said he didn’t have any details or direct contact with the big boss in China. Police say the 40 members of the unlicensed loan business face charges of illegally operating a loan business and charging interest over the legal limit.

And of course, the charge that led to their downfall – gathering in a small office without proper Covid-19 social distancing measures.

SOURCE:The Pattaya News

 

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19 Comments

19 Comments

  1. Toby Andrews

    Sunday, May 2, 2021 at 2:50 pm

    Good news for the ones that owe the money. They do not have to pay back now.
    This rate of 2.57 seem reasonable. But is it annual, or monthly?
    More information please.

  2. Slugger

    Sunday, May 2, 2021 at 3:25 pm

    2.57% over the legal limit, eagle eyes. Who says they dont have to pay back?

  3. ynwaps

    Sunday, May 2, 2021 at 4:13 pm

    Probably daily and they only borrow to very poor who need the money.

  4. Bigsleazypappa

    Sunday, May 2, 2021 at 4:57 pm

    My fiancé has been running a small loan business to her friends for over a year I set her up with. There’s lots of people doing it the only way they get caught is by greed. She makes enough to pay her bills and a bit left over a month.

  5. Robert Elliott

    Sunday, May 2, 2021 at 5:55 pm

    @Toby Andrew’s 2.57 above the legal limit. It doesn’t mention what the legal limit is.

  6. Frank

    Sunday, May 2, 2021 at 7:18 pm

    @toby I was thinking the same at least they get a break

  7. Robert Elliott

    Sunday, May 2, 2021 at 7:27 pm

    @Slugger – Why would they have to pay the loan back? It was an illegal foreign owned operation that was shut down.

  8. Simon Small

    Sunday, May 2, 2021 at 8:19 pm

    “2.57% over the legal limit, eagle eyes. Who says they dont have to pay back?”

    Sorry, @Slugger and @Robert Elliot, but “They were charged 2.57% interest, higher than the legal limit, …” is NOT “2.57% above / over the legal limit”.

    Note the comma(“,”), eagle eyes!

    That means it’s 2.57% over an unspecified time, which is “higher than the legal limit”.

    The legal limit is 15% per year.

    The 2.57% will very probably be PER DAY as @ynwaps said. Compound interest.

    That’s just over 1,000,000% interest per year. One million per cent (actually 1,052,903.376%).

    So if you borrow one hundred baht and don’t pay any back, after a year you owe 1,053,000 baht.

    That’s over one million baht after a year, if you borrow one hundred baht but don’t pay any interest back.

    Most borrowers never pay back the capital, only the interest, so for a loan of 100 baht they pay 20 baht per week, every week, just in interest.

    … and @toby andrews is right, @Slugger, they don’t have to pay it back but most will have already paid back far more than they borrowed.

    Who says? The law says.

  9. Simon Small

    Sunday, May 2, 2021 at 8:27 pm

    “My fiancé has been running a small loan business to her friends for over a year I set her up with.”

    She’s lucky to have lasted a year, @Bsp. Not because she’ll get caught, but because first she’ll lose her friends then, unless she has some hefty boyfriends, she could get very badly hurt.

    • Nigel

      Monday, May 3, 2021 at 1:42 pm

      Not true. I know many Thai women who loan out relatively small amounts to friends and friends of friends. Most are very reasonable in their approach and will be lenient of the person needs extra time to pay. These aren’t the type of people who send two guys around dressed in black on a motorbike to collect the interest. You should know this already!

  10. EdwardV

    Sunday, May 2, 2021 at 8:35 pm

    Chinese behind an illegal business in Thailand who would have guessed . It’s a cliche at this point.

  11. Shane

    Sunday, May 2, 2021 at 8:59 pm

    “They were charged 2.57% interest, higher than the legal limit”.

    That structure of that statement makes it very ambiguous. It states that they were charged 2.57%, which is above the legal limit (which is obviously untrue). If you remove the comma, its meaning is totally different (which is what the writer meant).

    Proofread prior to publication please.

  12. Toby Andrews

    Sunday, May 2, 2021 at 9:24 pm

    Oh, over the legal limit, and I see legal is 9.41, plus I assume it is annual.
    That is a hefty rate, but UK rates under under £1000 are 9.9 percent on a monthly payback, APR.
    I fail to see how the debtors can pay back to persons that are in jail, especially for an illegal loan.

  13. Simon Small

    Sunday, May 2, 2021 at 11:59 pm

    I sometimes genuinely wonder if some people her have ever been to Thailand.

    A loan shark making unsecured short term loans at 10 – 15% per year?

    Seriously?

    If you’re lucky, 10 – 15% a month.

    If you’re not so lucky, 10 – 15% a week.

    If you’re unlucky, 20% a week.

  14. 7.62mm of darwin

    Monday, May 3, 2021 at 3:33 am

    @Simon Small – without farang tourists to rip off the police have resorted to catching criminals real ones

  15. James Pate

    Monday, May 3, 2021 at 6:58 am

    Simon, you’re correct. Really hard-core loan sharks lending big sums to professional gamblers and other nefarious characters may charge 20% per day.

  16. YNBAW

    Monday, May 3, 2021 at 11:48 am

    We need your timeline for the last 14 days.

  17. Tony

    Monday, May 3, 2021 at 1:59 pm

    All that will happen is that loneshark operation will sell the lone book on to another lone shark and they will recupe as much as they can they will have all there details on a computer file in China so they will come looking for there money .That’s why they are called lone Sharks,they will awlays hunt there pray,

  18. Simon Small

    Monday, May 3, 2021 at 2:28 pm

    “Simon, you’re correct.”

    Thanks, @James Pate. It’s not exactly inside knowledge, as 20% a week (2.57% per day) is widely reported as the going rate for many unsecured loans.

    The only thing that surprises me is that the “old hands” commenting here are unaware of it.

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Neill is a journalist from the United States with 10+ years broadcasting experience and national news and magazine publications. He graduated with a degree in journalism and communications from the University of California and has been living in Thailand since 2014.

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