Three former managers of Nichiei Co., now under fire for excessively aggressive loan-collection practices, have told investigators that President Kazuo Matsuda threatened to dismiss or demote employees who failed to collect debts, it was learned Tuesday.
The trio of managers, who worked at the Tokyo branch of Nichiei, Japan’s largest lender of “shoko” high-interest loans, have since quit.
The Tokyo branch of the Kyoto-based company is where Eisuke Arai, arrested earlier this month, used to work. Arai allegedly suggested to a loan guarantor that he sell his body parts to pay off the debt. The suggestion is a violation of the money lending law, which prohibits aggressive loan collection.
The three managers told investigators they had been aware of the law banning aggressive collection but that employees had to continue pressing clients because they would often receive phone calls from Matsuda, who scolded them to improve their performance.
According to investigators, Matsuda himself checked the loan collection and lending results of branches and individual employees almost everyday. If performance looked bad, he directly called employees and ordered them to the head office.
Minefumi Gyotoku, 49, a former branch manager of Nichiei, has separately come forth to talk about how the company forced employees to deceive clients to collect money.
“The company says the interest rate on lending is 24 percent, but in fact, it was about 38 to 39 percent … I knew we were deceiving clients, but we had to cultivate new clients to make a living ourselves,” Gyotoku said.
He quit the company in 1997 for health reasons after working as manager of the Omuta branch in Fukuoka Prefecture.
“Once a customer borrows money, he’ll have to pay interest until he dies, or go bankrupt, being unable to repay,” Gyotoku said.
At branch managers’ meetings, the managers lined up in front of the president, with those with the worst records facing him first, Gyotoku said. “He made us stand up one by one, and yelled at us, asking by when we could collect money.”
Some managers broke out in tears and knelt in front of the president, he said.
One loan collector at Gyotoku’s branch told him that one of the clients hanged himself. In his hand was a telegraph from Nichiei, which demanded him to repay his loan, Gyotoku said.
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