China has a new way to force debtors to pay up their loans and the concept is scary, to say the least; people who default on their loans in China will now be named and shamed, having their personal details made quite public.
We found out that already, in some Chinese cities, those known as laolai, or “deadbeat borrowers” are already named and shamed in a bid to make them repay their loans.
The plan is to roll out the system nationwide. The Supreme People’s Court is working with the China Banking Regulatory Commission and the Communist Party’s Publicity Department to turn this into a public policy.
The new plan to force debtors to pay up will see those who default on bank loans being blacklisted and then having their name, ID number, photograph, home address and the amount they owe published or announced through various channels.
Channels And Databases To Force Debtors To Pay Up
These channels will include newspapers, online, on radio and television, and on screens in buses and public lifts. In keeping with the plan, local government have been told to set up name-and-shame databases – which will be searchable by anyone – by the end of the year.
When these databases become reality, they will be run by local media outlets, with the courts providing details of the debt defaulters and the banking regulator updating lenders on the blacklist.
In a Chinese city called Guangzhou, the personal details of some 141 debtors have already been displayed on screens in buses, commercial buildings and on media platforms at the request of local courts.
The situation is even worse in Jiangsu, Henan and Sichuan provinces where courts have teamed up with telecoms operators to create a recorded message. The message informs the caller that “The person you are calling has been put on a blacklist by the courts for failing to repay their debts. Please urge this person to honour their legal obligations.”
Considering that a mobile phone real-name registration system was introduced in China this year, all numbers that are registered under the name of the debtor will carry the message until the loan is repaid.
Angela Luo, a lawyer with Gold Sun Law Firm in Guangzhou spoke on the necessity of the measures;
“The authorities have been coming up with measures to tackle this for years, but with little substantial result. A court verdict is nothing more than a scrap of paper to debtors on the blacklist,”
“All of these measures are aimed at putting debtors under more pressure by shaming them. But to be honest, the effects are limited when we’re talking about people who are totally ignoring the authority of the law,”
It seems like anyone in Chinese society would have to be really shameless and immune to embarrassment to owe money now.