New Breed of Chinese Debt Collectors Shun Violence

by Mike Bevel, CollectionIndustry.com

Back in 2000, China banned the registration of debt collection companies due to increased threats and actual acts of physical violence against debtors. The companies didn?t disappear, and, with kinder and toned down practices in hand, they?re turning profits.

“Our class tells people what techniques, manners and laws to apply to persuade a debtor to pay,? said an unnamed Chinese source who preferred to remain anonymous. ?It is not about threatening the debtors with the law, but [educating] them to what they might face if they refuse.”

Statistics show Shanghai has more than 100 debt collection agencies, which collect debts amounting to hundreds of million of yuan every year. A company formed by legal experts in China and the United States to collect debts on behalf of Chinese companies in the United States was launched at the start of this month. According to National Business Daily, many of the collection companies, which charge at least 10 per cent of the debt figure for services, are kept very busy.