"Are you with the yakuza?"
The question is so commonplace for Steven Gan that he effortlessly uses it to launch into his vision for changing the image of one of Japan's most feared and reviled industries -- debt collecting.
The 46-year-old Chicago native -- he relishes the irony of being from a city famous for its mob history -- is one of the few foreign executives in a business traditionally, though not exclusively, dominated by Japan's mafia, the yakuza.
Their methods were brought starkly into the spotlight by the suicides in July in the city of Osaka of an elderly couple and a relative over a debt of just ?10,000 (US$84).
Extortionate interest rates had already forced the wife to pay back over ?100,000 before the pressure got too much.
Gan, who founded Tokyo-based credit risk management and collection firm Advance & Associates in 1992 after a spell at the Japan unit of technology firm Motorola Inc, knows he can't do much about such cases and steers well clear of them.
"It's a very big social problem here in Japan," he said in a recent interview at his office in a quiet western Tokyo suburb.
"But that aside, we are only collecting from people who have the volition, the will and the ability to pay. If a person says to me `I cannot pay, I don't want to pay, I don't care if you put my name all over the Internet', there's nothing we can do. There's nothing God can do," Gan said.
Gan is concentrating his efforts on the mob-free business of uncollected accounts receivables, helping smaller companies recover overdue payments. Such payments make up a market he estimates as worth some ?90 trillion (US$760 billion).
In an effort to beat the image problem, Gan has taken to giving seminars around Japan to explain his methods and push his vision for a professional and ethical collection business.
"Before I give a presentation most people are already thinking that I'm a foreign member of the Japanese mafia. That is very much embedded into their minds," he said.
"What I do first is explain the collection industry as it is carried out in the US. I then go into the history of credit risk management and collection here in Japan and then I talk about our own services," he said.
That way, he adds, people can look at the problem in a rational way, and they come away with a much changed impression.
While debt collection for most Japanese still throws up images of four-digit interest rates and midnight knocks on the door, there are signs of change in these harder economic times.
Personal bankruptcy cases in Japan more than doubled to 214,633 last year from 103,758 in 1998, according to court data, equivalent to one in 587 Japanese.
The total is still much lower than the 1.65 million cases in the US in the 12 months to June 30, last year, but it suggests Japanese are becoming more willing to bring their debt problems into the open and lends support to Gan's vision of a regulated national industry.
"If we can develop a collection industry that has, like in the US, an association whose members have to adhere to various ethics and standards, qualifications, regulations, we're going to change the image in society," Gan said.
Gan's own method is to have his 18 collection staff be always polite and unflustered, writing letters first, followed up by phone calls -- though not after 8pm.
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