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Dissapointed with loan shark

We borrowed some money from the owner of a hair dressing saloon but now we are facing a lot of problems paying back the money because even the interest is over 10 per cent per month. Over the last few months the interest we have paid amounts to more than the actual amount.

The loan shark has kept my husband’s bank card and withdraws the interest from my husband’s account and gives him the rest. We want to end the problem but we signed a letter saying we took a certain amount of money from this person. There is no mention of the interest on this letter. Is this operation legal and what can we do to get rid of the problem? The loan shark keeps threatening us all the time.

Name withheld
Answer:
It’s been quite a while since someone asked us a question on this issue although a lot of people in Kuwait are affected because they have borrowed money from loan sharks. So, we will offer the following answer — as we did the last time — for the information of our readers: “You and a lot of other people land themselves in such trouble as they find it easy to get money from these loan sharks but then end up with problems like yours.

This unauthorized lending of money is banned in the country and the Central Bank of Kuwait and the police have both warned people to stay away from loan sharks. People land in trouble because the loan sharks retain ATM cards or passports of individuals who take this loans.

They also get I.O.U. notes signed for the amounts loaned. Most of these loan sharks charge 10 per cent interest per month. There are many such ‘loan sharks’ operating in various parts of Kuwait and they all employ the same methods. However, their businesses are illegal and you can report them to the police.

They can’t keep your passport nor your ATM card. You must talk to the loan shark and explain the situation. You should tell him to return the passport and if he does not, you can go to the police. The loan sharks think that you can’t prove that they are taking a lot of interest from you and normally, when challenged in court, just say they made a loan in good faith.

They end up being acquitted. But you can prove they are using your ATM card because banks have cameras over every ATM and the film can be tallied with the record of withdrawals to confirm who took the money.

This, however, takes time and a lot of determination ... plus a lawyer and because the people who take the loan are already short of money they rarely resort to this process. But the best way — if you feel you can’t resort to the police or the courts — to get out of this situation is just to borrow some money from a friend or get a loan from a bank and pay back the whole amount all at once.

This will help you avoid paying the huge interest every month. If you look at the situation you will find that even banks charge less for the whole year than you pay in one month to the loan shark.

You can also send us your query through www.Facebook.com/arabtimeskuwait

 

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