The Central Investigation Bureau (CIB) is working to topple predatory lending cartels nationwide.
Pol Col Thittawat Suriyachai, a superintendent of the Crime Suppression Division, examines evidence of predatory lending networks.
But the ambitious task is being made more daunting, ironically, by the law and police themselves.
The CIB commissioner signed an order last month to root out underground lenders. A suppression unit was launched to catch illegal lenders and find the "big fish" among the loan sharks.
But penalties for illegal lending offenders are light, while some local police have sought bribes to look the other way.
The suppression unit brings together some of the more decorated crimebusters in the bureau, in a sign that those in charge of law enforcement are finally taking the problem of predatory lending seriously.
The unit includes leading senior economic crime officers like Pol Col Kitti Sapaothong, Pol Col Phuthorn Prissananantakul and Pol Col Sathit Prom-uthai, as well as Pol Col Thittawat Suriyachai, a superintendent of the Crime Suppression Division.
Pol Col Thittawat is deputy head of the unit of 44 officers. He is partially responsible for scouting for information to build a picture of how the lenders' networks operate and are interconnected.
The unit believes about 40-50 major networks of predatory lenders are operating nationwide.
Of these, two have the resources and backing to counter the authorities and keep their illegal businesses open. One network is based in Uthai Thani and the other in Chanthaburi.
Pol Col Thittawat said research into the syndicates uncovered two general lending methods. The first method imposes a 24-day repayment period and the second is the so-called "2%-interest" scheme, which virtually chains borrowers to slave-like repayment terms.
The 24-day lending scheme requires borrowers to repay an equal amount every day for the entire period.
The lender determines the daily rate of repayment so the entire principal of the loan is paid off in the first 10 days. The two weeks of repayments which remain are for paying interest alone, which can vary from lender to lender, but averages about 50%.
The legal limit on interest charged is 28% for registered non-bank lenders.
In the "2%-interest" method, the customers pay down only the interest portion, charged at 2% per month.
The repayment amount may be a lot smaller than that in the 24-day method but borrowers are exclusively paying down the interest, not the principal. Borrowers will carry on making the payments forever unless they come up with a lump sum to pay off the entire loan.
Most borrowers are low-income villagers or vendors upcountry, Pol Col Thittawat said. Many turn to loan sharks after financial institutions reject them because they have no steady sources of income or assets to use as collateral.
"They have no choice but to accept the loan conditions [from the illegal lenders] knowing full well the interest is way above the legal ceiling," he said.
In most cases, the loan is spent on motorcycles, gold jewellery or mobile phones, he said. Some use the loans to raise funds for gambling. On average, customers borrow 3,000-50,000 baht.
Lenders are aware of the high default risk and work to increase customer volumes, Pol Col Thittawat said.
The lenders also employ "black helmet" debt collectors who can be ruthless to customers who are repeatedly late on their repayments.
The collectors typically drive motorcycles and wear black helmets when they pay their customers a visit. They can terrorise the customers into making a prompt payment and may resort to physical assault, Pol Col Thittawat said.
"The collectors usually get a cut of 20% of the debt they chase after, on top of the 8,000-9,000 baht a month of salary which the lenders pay them," he said.
Recently, police have raided more than 20 predatory loan offices in major provinces such as Nakhon Ratchasima, Khon Kaen, Chon Buri and Phitsanulok, and arrested between 60 to 70 suspects.
Each lending network has at least 35 million baht in circulation per month.
Police said it is hard to nab the masterminds as they work through proxies.
The law provides for a maximum fine of 50,000 baht and a jail term of up to three years. Many offenders return to the trade after serving their prison terms.
Pol Col Thittawat said some police take bribes to turn a blind eye. "We're broadening our investigation and going after our own people as well," he said.
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Writer: Wassayos Ngamkham