Searching the key word “Online lending” in Vietnamese on Google, there are more than 49 million results in 0.6 seconds.

Meanwhile, key word “Online lending apps” has over 29 million results in 0.37 seconds of searching.

Online lending apps provide trust-based loans in which mortgage assets are not required and borrowers just need to show personal documents. The loans will be sent via banking accounts immediately.

Taking advantage of high money borrowing demand, black credit criminals have created tricks to trap borrowers with unofficial added fees and fake money exchange contracts.

This aims to force borrowers to take illegal actions. In many cases, the loans are not huge and the borrowing time is short but the interest rates are cut-throat, much higher than permitted legal rate.

According to Lieutenant Colonel Do Minh Phuong, deputy head of Serious Crime Division under Criminal Police Department, Ministry of Public Security, loan sharks set up shadow businesses which provide online lending services on Zalo, Facebook to lure a large number of borrowers who are mostly small business owners, low-income workers and adolescents.

Besides the money lending apps of credit institutions and financial companies, a lot of apps of unknown owner origin have been created. They often have names changed or information hided to avoid tracking by authorities.

When a customer installs a loan app and signs in personal information, someone will contact to offer borrowing money and ask them to install other loan apps. These apps have the ability to access to message history, calls, social network account information of the borrower for debt collection or for other illegal purposes.

Most of borrowers are students or low-income workers who need to borrow a small sum of money in a short time but do not want to sign in loan procedures at banks or credit institutions.

Customers may not notice or ignore the information binding regulations on interest rates, fees and fines, leading to being cheated with high interest rates of up to more than 300%. Some borrowers have to pay interest up to 1,000-2,000% per year, Lieutenant Colonel Do Minh Phuong said.

Regarding debt collection activities, Phuong said from January 1, 2021, the debt collection service business has been banned from operating to limit law violations.

However, some companies operate in the shadows under the name of security, legal advice, debt trading, debt collection authorisation companies, he said.

Borrowers have received phone calls from debt collectors who pretend to be law protection agencies to threaten or use personal information to offend borrowers.

In September 2022, a trans-national loan shark ring offering interest rates of 2,000% per year with 58 criminals involved was busted.

The ring which was well organised and led by foreigners established a technology company using 300 mobile phone apps and connecting with nearly 200 pawnshops and financial lending companies.

They recruited hundreds of staff and created dozens of websites and social network groups to search for customers.

The ring was divided into small groups, often gathered at the border areas and were ready to cross border every time they were discovered.

More than 160,000 people across the country were cheated on the online apps with total loans of 1.8 trillion VND.

Lieutenant General Tran Ngoc Ha, director of the Criminal Police Department, Ministry of Public Security, said black credit crimes are predicted to get complicated. The department has given consultations to local authorities to stiffen management on the work.

Criminals related to online lending apps with high interest rates and threatening borrowers might be subjected to fines between 50 million VND and 200 million VND or community sentence of up to three years if the illegal profits mount to 30 million VND to under 100 million VND.

If the illegal profits are 100 million or more, the criminals will face charges of 200 million VND to 1 billion VND or imprisonment of six months to three years.

The acts of threatening customers via calls, spreading false information, smearing borrowers who have not paid loans on time on social networks might face criminal charges.

The Steering Committee on Crime Prevention and Control of HCM City recently proposed the Ministry of Public Security and the National Assembly consider stiffening penalties on loan lending with high interest rates.

Accordingly, the six-month to three-year imprisonment following current Criminal Code is still a light penalty on black credit providers.

The committee also proposed the State Bank of Vietnam lift difficulties in accessing to loans so that people in need of borrowing money legally no longer have to seek for black credit services./. VNS