Thu, Jan 26, 2006 - Page 11 News List

Debt collection often illegal: lawyer

CNA , TAIPEI

Most of the nation's banks take advantage of credit card users' ignorance of the law when coming up with ways to scare them into paying their debts, a lawyer told a press conference organized by the Alliance of Fairness and Justice yesterday.

The alliance called the press conference before the Lunar New Year holiday because, in spite of the Financial Supervisory Commission's suggestion that the banks stop collecting debts from "card slaves" during the holiday, many banks are still commissioning "debt collecting companies" to frighten debtors into paying their debts.

Lawyer Huang Kuo-chung (黃國鐘) said most of the "debt collecting companies" use illegal means to achieve their ends. He urged "card-slaves" not to be duped, much less to take extreme measures such as committing suicide.

The alliance invited Taiwan Solidarity Union Legislator Lai Shin-yuan (賴幸媛), Chinese Nationalist Party (KMT) Legislator Justin Chou (周守訓) and others to inform the public of the illegal means being adopted to frighten "card-slaves" -- card users who incur so much debt that they cannot but borrow from one bank to pay the debt owed to another -- and to reaffirm their commitment to push for bankruptcy legislation that would include limits to the methods that banks are permitted to use to collect debts owed by card users.

Alliance convener Chien Hsi-chieh said banks have been using various forms of "official letters" to scare card users who are defaulting on payments, but the financial supervisory authorities are just paying lip service in their claims to protect consumers, doing nothing but "suggesting" that the banks step back for a while during the Lunar New Year period and not pressure debtors.

Huang said some banks issue "legal documents" threatening debtors that if they continue to defer making their payments, they will be charged with fraud. He added that some banks mail "debt transferring documents" to debtors and some simply ask "underworld elements" to collect the debts through violent means.

Some banks demand that the debtor sign an agreement to pay the debts by installment, some inform the debtor's employers to deduct the debt payments from their monthly salaries, while some banks issue or have government judicial offices issue "confiscation" orders or impersonate law enforcement authorities when carrying out these "scare tactics," Huang added.

These methods are all illegal, Huang said, as the law clearly defines that the transfer of a debt will not be valid until the transferer or transferee informs the debtor and that the exercise of rights and obligations must be done in good faith.

He said that some "payment urging" letters go as far as telling debtors that their possessions will be confiscated.

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