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Debt Collectors Resort to Violence in Russia

Wednesday, February 17, 2016 - Posted by Philip Harvey

With a recession in Russia following International Economic Sanctions (over the Ukraine / annexation of Crimea) and a collapse in the price of oil, there are now over 11 million Russians behind in their loan repayments.

In December 2015, a debt collector made a bomb threat against a kindergarten teacher which resulted in an evacuation of the classroom and police sniffer dogs sweeping the area.

In late January 2016 it was reported a collector chasing a 4,000 rouble debt, approximately AUD$75, threw a fire-bomb through the debtors window which badly burnt a 2 year old boy.

The source of the issue appears to be small micro lenders that are operating in an unregulated segment of the collection industry in Russia targeting the most vulnerable consumers. We note that ASIC is targeting low value payday lending in Australia.

Legislators have made statements that collection agencies should stop operating, with some wanting to introduce legislation that would prevent anyone from collecting a debt aside from the original creditor.

Culturally there are vast differences between Australia and Russia, however it is interesting there is a common thread of the cause of financial hardship on vulnerable consumers.

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