The Shylocks in our midst

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An Ah Along harasser warns a debtor to pay up in this reenactment.

An Ah Along harasser warns a debtor to pay up in this reenactment.

KIT CHAI (not his real name) is an only child. His mother is self-employed and his father died many years ago.

The 27-year-old studied up to only Form 5. He was never really keen on his studies, routinely flunking his exams. At a young age, he was already mixing with wayward friends and often up to all sorts of mischief.

In fact, he had been playing truant from the age of 13. He found night life fun, frequenting pubs and karaoke lounges with his older cousins, and had also been picked up for drinking at after-hour joints.

This derelict lifestyle went on until after his Sijil Pelajaran Malaysia (SPM) in 2007. Subsequently, to make his own way, he tried doing a bit of business selling laksa but found things were not as easy as he thought.

So he packed up and went to work in a car assessories shop belonging to a relative for about two years. It was at this time that Kit Chai heard from friends about a job that could earn him more money.

“Many of them were in it and they told me about the good income and the good life the job promised — especially that after I finished my work, they would bring me for happy hours at the night spots in town.

“Well, I needed the money and I couldn’t resist the temptation. At that time, I believed they were telling me the truth,” he said.

In 2011, he joined a company run by moneylenders, publicly known as Ah Longs (loan sharks). In the first year, his job was to interview loan applicants.

Kit Chai said although the company was licensed, it mostly operated Ah Long-style.

“When you come to borrow money, we don’t let you sign anything. We just take your identity card (IC), and when the time comes to pay up, we will call you. We collect payment every week, and if you don’t pay, we impose a penalty.

“For example, if you borrow RM1,000, we will pass you RM850 because we deduct the interest upfront. Then, every week, you have to pay us RM250 for

four weeks. We also have monthly and even daily packages. In fact, we have packages based on 15, 12, 10 or 8 per cent interest.”

Money-lending advertisements placed on a tree at a residential area.

Money-lending advertisements placed on a tree at a residential area.

‘Those who pay by monthly instalments are usually big borrowers’

Kit Chai said he worked a year for the company before joining another money-lending company where he has been working since.

According to him, those who choose to pay by monthly instalments are usually big borrowers.

If they cannot pay the capital on time, then a penalty fee will be immediately imposed.

Kit Chai said the daily-payment scheme was taken up mostly by food stall operators.

“If they borrow RM1,000, they will get RM900, and may pay back RM20 a day for 50 days. For any day they default, they will have to pay double the amount the next day. Any further accumulated non-payment days can only be cancelled out by paying the arrears plus a penalty fee in the next payment.”

Tiger lenders

There is a category of Ah Longs called the ‘Tiger Money’ lenders.

Kit Chai said the ‘Tigers’ were more ruthless, prowling for prey at gambling dens — very often around cockfighting pits — and slot machine parlours, usually located outside towns or cities.

“A borrower gets only RM700 for a RM1,000 loan. This has to be paid back within two days, failing which an interest of RM250 to RM300 will be charged. The borrower will have to continue paying interest until he settles the full RM1,000 in one go,” he explained.

Kit Chai believed there are about the same number of ‘Tigers’ and Ah Longs in Kuching — as well as the state as a whole.

Since he is working for a legal money-lending company, he considers himself a licensed money lender and his job (commonly known as an Ah Long harasser) is to hunt for repeat defaulters.

Kit Chai is paid a basic wage plus a commission of 4 per cent of the amount he can collect.

He said his company also had branches in Miri, Sibu and Peninsular Malaysia under the same boss — all duly licensed.

“The hardcore Ah Longs, I must say, are those from Semenanjung. They’re mean and you’re dead meat if you borrow from them. Most distribute name cards. They don’t usually have any licence and their office is almost empty.”

Harassment reports

On police reports of harassment against debtors, Kit Chai said the lenders would respond by producing valid loan documents, spelling out clearly the borrowing and repayment terms and conditions.

One of the requirements was that a monthly interest of 2 per cent (or any other mutually agreed rate) would have to be paid on top of the principal at the time of settlement.

In fact, this had been verbally clarified and agreed to with the debtor, he added.

So that means 24 per cent a year.

Kit Chai said those who lodged police reports would still have to pay up but may negotiate for a lower amount.

“Nowadays, debtors are smart — they will report to police once we start calling them. When we go to their homes, honking our cars, they will call the police.

“But frankly, we prefer they report to the police because this is our opportunity to meet the debtors face to face. At the end of the day, they still have to settle — probably the amount will be lower.”

The problem is some will stop paying again after a month or two — and that’s where Kit Chai comes in.

“I’ll have to go hunting for them — usually with a team of three to four people. We’ll go to their workplaces or homes — even the villages where they live. It’s only when they are too stubborn and quarrelsome that we take action on the spot.

“If we run out of options, we will ask their family members pay. Not before that. We won’t leave empty-handed even if we have to wait outside their house the whole night. We wait until they pay. If they call the police, then we talk at the police station.

“Nowadays, there are debtors claiming to know the law while some have turned out to be very aggressive. One time, we went to a house and the debtor’s father rushed out, waving a parang and threatening to attack us.”

When asked if he resorted to violence Kit Chai said, “Only if worst comes to worst.”

He pointed out that women debtors were treated more gently.

“It’s often easier to collect from women because they want to avoid trouble, especially when voices are raised.”

According to him, a licensed money-lending company will have to be more careful in collecting debts because if the authorities receive seven to eight complaints against it in a year, the licence will be revoked.

Introducers and agents

On those who brought business to money-lending companies, Kit Chai said these people were known as introducers and also considered as agents.

Their role, he added, was to help ‘solve’ customer problems by introducing new money lenders to debtors to supposedly help the latter settle their first debts — with perhaps some money left for spending.

But the opposite is what usually happens — the debtors getting into bigger financial problems for being passed around from one agent to another.

“It’s not unusual for them to end up with enormous debts. This is the unfortunate but common scenario,” Kit Chai said.

He noted that Ah Longs from Peninsular Malaysia used a different tactic in that they would ask someone to get to know you and your debt problems before introducing you to a money lender from their group.

Soon, another person would befriend you with the same promise to help you solve your debt problems through another money lender.

In fact, all these ‘friends’ are connected. The result is that you will eventually be left with never-ending debt.

So how do this type of debtors settle their dues?

According to Kit Chai, some will mortgage their house or land although licensed money lenders cannot accept such deals because they are considered “too big”.

Moreover, the licensees are not pajak gadai companies or pawnshops. Alternatively, they may accept gold or anything valuable as mortgages.

Asked if debtors were ever beaten up until they had to be hospitalised, Kit Chai replied, “No, our group in Kuching is not so cruel. But our partners from Sibu branch who come over here to collect debts aren’t so kind, especially to debtors owing more than RM5,000.”

Throwing a molotov cocktail into a debtor’s house compound can be a warning from Ah Long harassers to pay up.

Throwing a molotov cocktail into a debtor’s house compound can be a warning from Ah Long harassers to pay up.

Molotov cocktail

Other methods of dealing with bad debtors are locking their house gates, pasting posters (including enlarged photocopies of their ICs) in the neighbourhood or at road junctions to shame them, slashing their car tyres or towing their cars away.

The worst method is throwing a molotov cocktail into the house compound.

Kit Chai said so far, they never threw paint.

Although most Ah Longs are licensed, the modus operandi, adopted by many of them, may at times appear ‘not so lawful’.

“For example, we may take the debtors’ ATM cards and withdraw their salaries on payday. We take what is owed us and give the balance back to the borrowers.

“Most times, the debtors will be broke again after we take their salaries. So they borrow from us again. This is called taking an ‘advance’ from us.”

According to Kit Chai, a lot of borrowers are civil servants, teachers or even army personnel and policemen.

“Nowadays, we don’t really want to lend to people from the army or the police because it is difficult to collect, especially those from the army, because they live in army camps, making it access almost impossible.”

His group was only able to enter an army camp once in Sri Aman, he revealed.

He said honest borrowers would settle their debts while others tried to avoid their creditors.

“This puts us in a difficult situation — so much so that we have to put up enlarged photocopies of their ICs (with details of our contact numbers) at road junctions near their homes.

“We may even paste posters at the police station, then make a run for it before we get caught. Normally, the police will tear up the posters and ignore the matter. As for the debtors, they seldom, if ever, bother to call us to find ways to settle their debts.”

Kit Chai said, on average, out of 10 borrowers, seven would usually have problems paying back.

He believed it was an attitude problem because he noticed many debtors seemed unconcerned about settling even if they had the money.

He said if only they paid according to schedule, they would not have to suffer the burden of paying higher interest.

A lot of debtors even go to the extent of getting new ATM cards, nullifying the cards held by the money lenders.

The borrowing conmen

There are some borrowers who are conmen. Kit Chai cited a case where a man borrowed from eight companies by producing bank statements, salary slips and other documents that all turned out to be fake.

“We searched high and low for him, and one day, we stumbled upon him at a money lending company. We grabbed him and taught him a lesson. We learned

he had also got into trouble with other Ah Longs. We dragged him to the police station and the court because we had proof he was a conman.”

Kit Chai said borrowers who went into hiding for more than a year — or longer — would have to face up to the consequence of paying back a bigger debt because of accumulated interest.

He said there was the case of a man who borrowed only RM500 but ended up owing RM30,000 after defaulting for four years. And amazingly, he eventually settled by instalments.

In another case, a man ‘disappeared’ for many years after borrowing RM6,000. His debts swelled to over RM50,000.

The Ah Longs finally found him in Sibu. After negotiation, he got a discount and settled the next day.

Chai Kit quipped, “Some debtors are really good magicians. They seem to vanish into thin air after borrowing money. It’s really difficult to find them.”

There are also cases of borrowers who died before they could settle their debts. But that doesn’t mean their debts died with them and would be written off since their family members may be made to pay.

Giving an example, Kit Chai said a father ‘disappeared’ for quite a long time after borrowing money. He was later found to have died and his son was asked to settle the debt.

Borrowing from Ah Longs

Asked why people borrowed from money-lenders, he said some genuinely needed the cash but repairing or renovating homes, buying things or doing business was the most common reason people gave for turning to Ah Longs.

Whether true or not, the lenders do not know or care.

Kit Chai said they also discovered there were people who borrowed to go for holidays and shopping, buy the latest handphones or luxury cars.

Some people simply wanted to live a life of luxury, even if they couldn’t afford it, he added.

According to him, many are young people although government pensioners are not exempt.

On background checks, he said they were carried out in the past but nowadays, due to tough competition from rival lenders, loans were given out randomly.

“Whether or not the borrowers can pay back is their problem. My job is to make sure they do.”

He said the rivalry was so great now that lenders even tried to hold on to borrowers by encouraging them to take out more loans “so that we can keep them”.

Kit Chai estimated in Kuching alone, there were already around 200 money-lending companies — and one company can open up to 50 branches.

He said although Ah Longs may have a bad name, they also provided an important service to those in need emergency funds.

“It’s an alternative to banks. All the borrowers have to do to avoid trouble is to pay back as agreed.

“If you borrow with an intention to cheat, of course, you’ll be in trouble. You must only borrow if you know you can to pay back.”

Eyeing greener pastures

Asked if he ever regretted taking up his present job, Kit Chai said for him, it was just a way to survive, adding that if he could find a better job, he would go for it because he didn’t want to be a debt-collector all his life.

He also said if he had enough money, he would like to operate a business, most probably a food business.

Asked whether he had learnt anything from his present job, he said three things — speaking well, judging people’s behaviour and knowing if someone is lying.

Most importantly, after seeing first-hand the nightmares desperate debtors had to live through to keep the Tigers from the door, he vowed never to borrow money unnecessarily, reminding his relatives and close friends of the consequences of dealing with Ah Longs.

“My honest advice to young people is not to think of getting a job like mine. Find a proper job and don’t be choosy about starting salary. Also, try not to borrow this kind of money and suffer when it’s time to pay back,” he said.