At the end of the year, be careful with black credit tricks

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Leaflets for loans are always plastered in densely populated areas. Photo: H. Diu

The demand is higher and higher

According to the State Bank, the whole system currently has 16 active financial companies, including 12 consumer credit finance companies such as FE Credit, Home Credit, MCredit.These companies compete directly with one another at electronics centers, shops and direct lending when customers buy products and services, issue credit cards with lending interest rates from 1.7 to 5.2 percent / month depending on the loan amount andperiod. Besides, the commercial banking system is also "racing" in the field of consumer lending by associating with sales units.

In particular, banks allow 0 percent interest in case customers use credit cards to pay for goods. In addition, many banks also apply interest rate incentives, gifts, bonus points for customers using cards. Besides, with demands such as buying a house orcar, banks offer loan programs up to 85 percent of the value of the car, the time for receiving and processing documents is only 4 hours, the maximum loan time up to 8 years, applying 0 percent interest rate for the first 3-9 months, after that the interest rate will fluctuate around 11-13 percentper year depending on the loan tenor. When applying for loans, customers can use payroll, life insurance contract, electricity bill. For financial companies, customers can use the 0 percent interest installment purchase and sale, with a prepayment of 0 VND. In addition, customers can choose the form of peer-to-peer lending (P2P) with attractive interest rates.

Therefore, FiinGroup's statistics show that consumer credit increased by an average of 66.3 percent per year during 2015-2017, much higher than the 20 percent level of 2013-2014. Growth in 2018 was 30.4 percent, lower than the average of 59 percent 5 years ago. Consumer credit is playing an increasingly important role as the proportion of consumer credit to total credit to the economy has increased from 12.3 percent (in 2016) to 17 percent (in 2017) and 19.7percent (in 2018). However, this is still lower than otherdeveloped countries in the world (40-50 percent). From these numbers, experts of Rong Viet Securities Company (VDSC) said that in recent years, Vietnamese consumers have been more willing to buy high-value items after paying essential living expenses, such as new technology products or vacationsto improve quality of life. At the same time, the consumption trend of Vietnamese people is gradually changing in the direction that people shift from cash payments to bank payments and tend to be willing to borrow for life's needs instead of saving until you have enough money to buy the product you want.

New tricks

But this strong development is alsodual in nature. When consumer loans are aimed at borrowing money with a quick and simple procedure, many companies and online applications have set up "tricks" to borrow quickly without collateral, by simpleprocedures to attract customers. Then, when customers cannot pay on time, they will be subject to "exorbitant" interest rates and other forms of debt collection.Many financial companies also offer black credit “traps” that make it harder for debtors to fall in if they don't have to pay “huge” principal and interest.

With online lending tactics by using apps on smartphones, or via social networks, users only need to follow the requirements, take pictures of portraits, providing account numbers, allowing applications to use phone book data, social media information, etc; they will allow you to borrow money in the short term. When the loan is due, customers will be reminded to call and introduce another application, borrow a larger amount to pay off the old debt. Just like that the new debt weighs the old debt, the parent's interest ratesthe amount the customer must pay many times compared to the original debt. There have even been cases when a customer does not borrow to repay the debt, the profile of the customer will be cut, smeared into a comment or sent a message to all friends on social networks, even in the phone book.

According to experts and regulatory agencies, near the end of the year, consumer loans have negatively affected the lives of people. Therefore, the State Bank has continuously issued warnings as well as measures to inspect and closely monitor the activities of financial companies, peer-to-peer lending units and online lending.This agency also requires related units such as Justice, Police, Finance to coordinate to repel black credit. The Governor of the State Bank also requires the whole banking system to strictly manage officials and employees in strict compliance with the provisions of law. Bank employees must not engage in activities related to black credit. In addition, the agency also issued many policies to tighten consumer lending activities in accordance with the legal corridor in line with the general management of consumer lending companies aroundthe world.

Prime Minister Nguyen Xuan Phuc also issued a Directive on strengthening prevention, combating criminals and legal violations related to black credit. The Prime Minister asked the agencies to set up interdisciplinary working groups led by the police force, open a peak, conduct administrative inspections, tighten the certification and strengthen management of facilities of pawnshops, loans, financial businesses, debt collection services and other business establishments showing signs of heavy loan interest and debt collection activities in order to detect crimes and law violations to strictly handle them. Therefore, in recent times, many criminals related to black credit have "trapped" functional forces, deceptive tricks have been exposed to light, becoming a wake-up call for those people before black credit.