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Angry victims take loan sharks to court

Date Posted: 2004-11-18

Consumer credit companies and large credit card companies are being accused of ripping off its customers with outrageously high interest rates on accounts.

The action comes in a lawsuit filed by 260 customers irate at the high charges. They’re asking the Naha District Court to make the credit card companies give back ¥285,000,000 they’ve paid already. This is the third largest suit filed against companies.

Hiroshi Ishihara, chairman of an organization formed to protect consumers with damaged credit, says this is the second suit filed nationwide, and is part of 741 cases. He says 40% of the complainants come from Okinawa, while the bulk are from the other 45 prefectures. Ishihara notes there are few problems in Osaka, Tokyo and Hokkaido.

An even larger problem looms as challenges are made to non-traditional loan companies, called SalaKin Companies. They’re the equivalent to loan sharks, giving money to people who cannot find resources from traditional banks. It is difficult for Japanese to borrow money from a bank.

Typically, SalaKin Companies charge 36% interest on the principal. Customers are trapped into making the loan deals, because they need the money badly. When the borrower can’t pay up, the trouble begins.

SalaKin companies ask for double interest, and demand frequent payments. “If you can’t pay it,” they’re told, “your relatives must pay it.” The pressure is heavy, and collection agents are mean spirited, to say the least. They call peoples’ homes late at night and make threats.

Seriously in debt, oftentimes people turn to embezzlement from their companies to get the money to repay the SalaKin companies. In extreme cases, which officials say are becoming more common, the pressure to make payments leads customers to commit suicide.

Officials say the stresses caused by SalaKin companies are partially to blame for Okinawa men’s life expectancy dropping from the best in Japan to 27th. They say the most prone to suicide are men in the 35-55 age bracket. Those men are most likely to need money to fuel their businesses and personal lives.

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