Violent, threatening tactics for debt collection often go unpunished
In Shakespeare’s comedy The Merchant of Venice, Antonio borrows money from Shylock, with the corresponding collateral being 1 pound of Antonio’s flesh. Unable to repay his debt within the preset time period, Antonio is faced with mortal danger. Given the change in times, it would seem that debt is no longer grounds for such exacting interest payments. But sometimes, said one debt defaulter, "when I pull over at a highway rest stop, I look at the stickers in the bathroom advertising payment for organs, and I think about selling off parts of myself." Judging from the words of this present-day debtor, the same direness surrounding debt has survived to this day. Burdened with credit card debt of 2.5 million won (US$2,550), Mrs. Kim’s phone rings nearly every day with calls from the debt collection agency urging her to settle her arrears. She promised to reimburse the money within two months, but the debt collector was obstinate in demanding a 15-day period for repayment. The agency even phoned her mother’s workplace, threatening to seize her mother’s monthly wages. An analysis by the South Korean Financial Supervisory Service estimates the total number of those in debt to banks or other financial institutions as surpassing nearly three million people. And once entered into the ranks of debtors, it does not take long to become the target of debt collectors demanding repayment. Those who have suffered such harrassment describe the creditors as merciless and unyielding, between their use of foul language and collection ’thugs’ to bang on debtors’ doors and shout in order to disgrace them to their neighbors. The most representative forms of unlawful debt collection include instilling fear and discomfort through unannounced visits and phone calls, notifying third parties of a debtor’s financial status, as well as using threats and violence. According to a survey of private loan recipients conducted by the Financial Supervisory Service, 46 percent in 2003, 71 percent in 2004, and 39 percent in 2005 of debtors experienced such unlawful debt collection tactics. In particular, financial loan defaulters are two to three times more likely to be the victim of illegal debt collection activities than conventional debtors. According to the survey results of one private group, the real situation is even harsher than the figures would suggest. The results of a survey of 287 financial defaulters in Busan and Daegu conducted by a civil organization called the Financial Debt Social Responsibility Alliance, the results of which were announced last June, showed that 80 percent of respondents had been victims of illegal debt collection activities more than once.There have also been instances in which credit information agencies illegally extracted private information regarding debtors from public officials. A former employee of one credit information agency, Mr. Gang, told The Hankyoreh in a phone interview that "in order to find out about debtors’ place of work, family, and other personal information, [the debt collection agencies] bribe local officials to supply them with thousands of official citizen registration forms at once without following the proper procedures [for obtaining these]." He said that debt collection agencies even give money to the doctor or pharmacist of the debtor "to find out whether the debtor is enrolled in an insurance program." Despite laws governing the loan industry and identity protection, it is all too rare that debt collection agencies are punished for their illegal activities. Though there have been a total of 274 instances of appeals to the Financial Supervisory Service regarding illegal debt collection activities, the number of these incidents referred to investigators stands at less than 10. An official at the Financial Supervisory Service, said, "Pertinent legal provisions are quite vague, making it difficult to secure ample evidence on whether or not punishment is justified." Seo Chang-ho of the Solidarity for Human Rights said that "even if one brings charges against loan collection agencies in regard to illegal debt collection activities, for a debtor that is regarded as being in the inferior position both legally and morally, it is not easy to turn down a settlement offer from a creditor instead." In regard to this, Lee Heon-uk, a lawyer and member of the People’s Solidarity for Participatory Democracy, said, "As the illegal collection of debt represents a problem in which it is difficult for the debtor to stand up for himself, this sort of action will not disappear so long as the judicial authorities do not regard it as an infringement upon the public welfare and take stern measures accordingly." This article was written by Lee Jae-myeong and translated by Daniel Rakove.
