Personal Finance

More 'credit card slaves' trapped by crushing debt

By Ma Chao (China Daily)
Updated: 2010-07-21 17:05

Some debt collectors, he said, have used insulting language to intimidate him.

"I felt very depressed every time after I received such a phone call," he said.

Earlier this month, a bank got hold of his girlfriend's phone number and she too has received calls every day.

Intimidated by the phone calls, the pressure has put a strain on their relationship and they frequently quarrel.

"I think I'm a failed man," he said. "I make my girlfriend live in fear. I decided to leave her after thinking over the issue painfully."

A netizen, who goes by the name of QQ Wep, is also a credit card slave. She said she once received an SMS from a debt collector stating: "You must call us to negotiate on the matter of debt payment in 24 hours. Otherwise, your fame will be stained because we are going to make an advertisement about your debt in the local newspaper. We'll sue you in court. You will be put into prison and will not be able to find a proper job after your prison term. Your relatives who are sheltering you will take a heavy toll, too. Don't embroil your family in it!"

The bombardment of phone calls is a common method used by debt collectors and, like in the SMS to Wei Ping, the debt collectors often try to involve debtors' family and friends.

Some debt collectors may even seek casual acquaintances of debtors in an attempt to embarrass the debtor into paying.

"I have received a phone call from a debt collector and her attitude was very aggressive," said Wu, a white-collar worker who was only targeted because his boss' wife had defaulted on a debt.

Wu said the call made him feel very uncomfortable. "Why were they so truculent with me? I didn't owe money to them."

If making endless phone calls does not work, some debt collectors may try to lure the debtor into paying up through other means.

Many pretend to be lawyers, couriers and even police officers in order to get information from debtors.

"I have seen with my own eyes debt collectors pretending to be couriers and asking my friend to open the door for them", said Liu, the friend of a woman who owes around 20,000 yuan to a bank. Since a debt collecting company got her number, she has been harassed by phone calls countless times.

On July 1, Zhong Zhaofeng, a white-collar employee who owed 6,000 yuan to a bank, went on a date with a cyber-friend. However, when he arrived at the rendezvous, three men surrounded him and compelled him to go to an office where he was detained until police arrived. The cyber-friend was in fact an employee of a debt collecting company.

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Ma Zhizhong (not his real name) once worked for a debt collecting company and was in charge of visiting debtors' residences, including their parents' homes, to ask for payment.

On several occasions, he said, he visited elderly impoverished parents whose children owed thousands or even tens of thousands of yuan to banks. They were all shocked when they heard the bad news.

"The despair and horror on their faces still haunt me," he said.

But Ma said the debt collectors are motivated to work hard on chasing down their targets because they can earn handsome profits.

During his first month at the company, most of his colleagues earned more than 10,000 yuan and his boss could make 120,000 yuan a month in bonuses.

Ji, a manager with a credit card center attached to a commercial bank, told METRO that banks usually directly contact debtors initially. They commission debt collecting companies only after debtors have defaulted for more than a year.

Debtors who owe very large amounts to banks for a long time are usually sued through the legal process, Ji said.

METRO called some debt collecting companies based in Beijing that did business under the description of "investigation company", "commercial consulting company" or "law firm". The companies typically asked for 30 percent of the bad debt in commission.

"We'll use proper means and you do not need to worry about legal matters," said an employee of Heibao Investigation.

Man Ligang, a legal expert, told METRO that it is legal to commission an agent to reclaim a debt but if debt collecting agencies infringe on debtors' personal freedom or use intimidation, they may be breaking the law.

Wang meanwhile is still living in fear of the telephone.

"I have divorced my husband," she said. "But the banks still call me to pay back the debt."

With a salary that is less than the interest on the debt, she doesn't expect the feeling of fear and helplessness to finish any time soon.