China is Launching a National System That Publicly Shames People Who Don’t Pay Off Bank Loans

China is creating a system that publicly shames people who default on their bank loans.

Developed by the Supreme People’s Court, the China Banking Regulatory Commission and the Communist Party’s Publicity Department, the system targeting laolai or “deadbeat borrowers” will be rolled out at the end of the year, Xinhua reported.

The policy, believed to boost “trustworthiness,” is merciless — failing to pay a bank loan will get one’s name blacklisted, and other data such as home address, ID number and photograph, published across multiple platforms, including online, print, radio, TV and other public displays.

Defaulters are then compiled in databases run by media outlets, all searchable by the public. Courts are providing details.

Angela Luo, a lawyer in Guangzhou, said that court verdicts, unfortunately, are really “nothing more than a scrap of paper” to debtors (via South China Morning Post):

“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.”

The upcoming national system appears to be the synthesis of debtor approaches previously rolled out — including public shaming on huge billboards.

For one, the People’s Court of Songyang County in Zhejiang Province submitted a blacklist to Sesame Credit, a credit-scoring system run by Ant Financial, an Alibaba subsidiary. A debtor surnamed Jiang was put on the list for failing to pay a hospital 2,951 yuan ($448) after receiving treatment in 2003. His credit score immediately went into a nosedive, forcing him to pay.

In partnership with a telco operator, the Guanyun County People’s Court in Jiangsu Province also started shaming debtors by telling their callers through a “special ringtone.” The audio goes like this:

“The subscriber you are calling has been put on a blacklist by the Guanyun County Court for failing to repay their debts. Please urge the person to fulfill his legal obligations. The Guanyun County People’s Court appreciates your support. Thank you!”

What do you think about China’s ways of dealing with laolai?

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Contributer : NextShark