Many falling prey to illegal practice of ‘loan sharking’

KUWAIT CITY, Oct 29: Loan sharking is widespread in Kuwait and a lot of low income people are increasingly falling prey to the illegal practice, says a Kuwaiti lawyer. Labeed Abdal told the Arab Times that low income people who are unable to secure loans from banks or other financial institutions turn to loan sharks who reportedly exploit the lot, thereby leaving them high and dry. “Taking money from a loan shark is like signing one’s own death warrant as life will never be the same again. It’s a vicious circle. The lender usually charges between thirty and forty per cent interest on the loan. Some unscrupulous elements keep inflating the interest rate and often refuse to surrender the promissory note, thus sealing the fate of the borrower,” he added. “The loan sharks subject their clients to harassment, blackmail etc. Loan sharking is a serious crime in Kuwait and those convicted can be jailed up to three years with fine.”

Citing an example, he said that a Pakistani man recently was duped by a lender after the former took a loan of KD 2,000 from his compatriot. Abdal observed that the Pakistani man was given the loan with an interest rate of 50 per cent even as he was made to sign several promissory notes. “Each time the victim paid a portion of the principal amount, the promissory note to the tune of that particular amount was left uncancelled. Moreover, the loan shark told the victim in no uncertain terms that he would cancel all the promissory notes once he is through with the entire amount. The victim sensed trouble, and sought our legal assistance,” he added.

Abdal added that he advised the Pakistani man to take a friend along to make a payment and that the latter was to serve as a witness in a case that was to follow. Based on the statement of the witness, he said a complaint was filed at a police station even as a report was obtained from the CID against the accused who had a police record.

Abdal noted that the Pakistani man was arrested and was later convicted by the Court which jailed him for two years. He added that many loan sharks keep passports and bank cards as guarantees even as he warned that people should stay clear from loan sharks and only seek loans from banks or financial institutions. In another case, he said his client had taken KD 20,000 from a loan shark who used to harass him and his family if he delayed the payment. He added that his client was made to sign checks by the accused and due to some reason the victim could not repay the loan. He added that the accused threatened to sue the victim if he did not return the money within a month’s time. Abdal went on to say that he quickly filed a case against the accused at a police station and that the accused had a criminal record. “This bolstered our case and we got a CID report as the accused was immediately arrested and the case proceedings are ongoing,” he concluded.

By Francis A. Clifford Cardozo
Arab Times Staff

http://www.arabtimesonline.com/kuwaitnews/pagesdetails.asp?nid=24154&ccid=9