The Immigration Bureau was called in to act when complaints were made by customers who were stiffed by the illegal and expensive moneylender which employed up to 46 Thai locals to do its collections and street work across Bangkok while foreigners manned the nerve centre from the online loan operation in the centre of the capital city.
The Head of the Immigration Bureau Police Lieutenant General Sompong Chingduang led a raid by his officers to snuff out the nerve centre of an illegal money lending racket in Bangkok this week being staffed by Chinese nationals.
The Head of the Immigration Bureau Police, Lieutenant General Sompong Chingduang, led a raid, this week, on a house being used as an office in the Wang Thonglang area of Bangkok to operate an illegal money lending app charging local people exorbitant levels of interest, well above the kingdom’s legal limit of 15%.
The police chief gave details to the press at the scene where Immigration Bureau police officers arrested five Chinese nationals and one Singaporean who were operating the headquarters of a mobile app called ‘Speedwallet’ which advanced loans in the region of ฿5,000 to ฿20,000 at a time while charging customers at rates of interest from 12 to 15% per week for the privilege.
46 Thai locals paid a salary of ฿12,000 per month to collect debts owed to the money lending service
Police Lieutenant General Sompong explained that the app also employed up to 46 Thai locals who acted as representatives and debt collectors for the enterprise.
They were paid monthly salaries of ฿12,000 per month.
‘The suspects had allegedly opened a mobile application called ‘Speedwallet’, which provided loans of ฿5,000 to ฿20,000 per customer and collected interest rates at 12% to 15% per week, exceeding the legal limit of 15% annually,’ he explained.
Complaints from customers who were shortchanged
The top policeman said his police bureau had received complaints from customers of the service, nearly all of them victims of the illegal outfit.
‘Police had received complaints from several customers of the application, so we started tracking down the owner. Further investigation also showed that they had previously allegedly run eight applications before Speedwallet and had more than 5,000 customers.’
Nerve centre tracked down to Wang Thonglang in central Bangkok and a rented house
Working from information passed on by customers, police eventually tracked down the headquarters of the operation to the rented house in Soi Town 3 in Wang Thonglang.
It is understood that the app had used that location as its headquarters for about a month before the police swooped on them this week.
‘The company allegedly hired several Thai staff as debt collectors, with a salary of ฿12,000 per month,’ he disclosed. ‘One of the victims reportedly said that the gang gave them only ฿2,900 from a ฿5,000 loan contract, and had requested their mobile phone number and other personal data,’ he explained. ‘Anyone who failed to repay their debt would be harassed via phone calls until they paid up.’
Scale of informal lending is vast but not properly quantified. Official household debt is at 90% of GDP
The scale of the informal or illegal debt problem in Thailand has not been properly quantified but even the official figures for household debt are a source of concern to the Bank of Thailand and economists in the kingdom.
It is important also to note that some informal lending in Thailand, particularly on property-based loans, is perfectly legal and often overseen by government agencies.
At the end of September 2020, Thailand’s household debt figure stood at a massive ฿13.8 trillion or 87% of the country’s GDP and is sure to have reached a predicted 90% by the end of the year.
Horrific impact of informal lending on Thais
While the informal sector is unknown, what we do know is horrific. Many teachers, professionals as well as army and police officers have massive outstanding debts to loan sharks.
On Christmas Eve 2018, Army Lieutenant Jaruphum Panator robbed a bank in Buriram province. He got away, only briefly, with ฿1 million some of which he used to pay outstanding debts to loan sharks.
Businessman in Bangkok murdered his family
By far, the most harrowing story was from April 2019 when a 46-year-old, formerly hardworking and respected businessman in the Khlong Sam Wa area of Bangkok, took the life of his 25-year-old wife and two daughters in a family suicide by slitting their throats and his own.
The man, identified by police as Natthasak Khamkhern survived leaving local officers investigating a nightmare.
The root of the problem was outstanding money to loan sharks whose high-interest rates overpowered the family when their car fitting business hit a downturn.
Former Immigration Bureau Chief led a single operation in Bangkok that seized ฿1 billion in assets from wealthy money lenders
That year, in February, Police Lieutenant General Sompong’s predecessor, Police General Surachate Hapkarn or ‘Big Joke’ had led a massive raid on up to 55 illegal debt networks in Bangkok.
14 people were arrested including 12 men and two women and up to ฿1 billion in asset seized with nearly 200 land deeds. The haul included luxury cars, hotels as well as a range of businesses.
Such is the scale of these enterprises and the vast profits they deliver by pressing on the vulnerable necks of borrowers and their collateral victims such as Mr Natthasak’s young wife and daughters.