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Feb 14, 2017

Fighting Back Against Unscrupulous Moneylenders: Attorneys Have Tips

News Five has been reporting on the case of Orange Walk resident Janine Vega and Laura and Julio Blanco of Pay Day and EZY Loans Pawning. Vega attempted to satisfy repayments in full for two separate loans totalling three thousand, five hundred dollars, for which collateral was a thirty-acre cane field property in Indian Hill East Registration Section which the Blancos illegally transferred into their name. When she was not successful, she challenged the matter in the Magistrate’s and then Supreme Court, where Justice Sonya Young ordered the property returned. She ruled that moneylenders have no right under the law to take a customer’s assets, mortgaged for the loan, as their own if payment is not made as agreed. She noted that the defendants’ actions were unlawful and thus, the pawn shop was directed to return the property forthwith. Vega’s attorneys, Estevan Perera and Kevin Arthurs, gave a wide-ranging interview on Friday addressing the question of how much of this type of activity goes on and what borrowers and lenders need to be aware of. Aaron Humes has more in the following report.

 

Aaron Humes, Reporting

“Neither a borrower nor a lender be; / For loan oft loses both itself and friend.” Polonius’ maxim from Shakespeare’s Hamlet has lost none of its relevance. But more recently, we have learned that the business of borrowing and lending in Belize is big business – and in some cases, shady business. Attorney Estevan Perera says the misleading begins from the minute you walk into your neighbourhood pawn shop. He presented five points that borrowers must look out for when dealing with pawn shops so that they don’t end up in an unfair financial arrangement.

 

Estevan Perera

Estevan Perera, Attorney

“The first thing is, the money lenders are supposed to have a sign inside their business depicting the forty-eight percent or the maximum annual interest rate that they have. They must also give you the sign contract that states what they are charging the principal, the interest all the terms of the agreement. They must also not refuse from giving you an account of your statement whenever you want an update as to where you are how much, wants the balance and all of that. The money lenders must also not surpass the four percent interest rate whatsoever and then the 5th is that the money lenders are not entitled to keep the collateral that you give. So for example when you borrow and the money lender, asks you for your collateral – now, what the money lenders are doing in Belize right now, are they are asking the borrowers to sign over their property, their house and lot, their vehicles, they even promote it as “pawn and drive” – that’s the common words  used right now.”

 

 

Perera gave real-life examples – some of which are pending cases – of people giving up properties valued in six figures and vehicles valued as much as eight to ten times the cost of the loan. In one case, the shop kept the property and actually tried to have the homeowner evicted! The ultimate penalty for violation of the Moneylenders’ Act is revocation of licenses. But who polices the pawnshops and are they aware of the new paradigm? Attorneys Perera and Arthurs say they have taken it upon themselves to step forward because the importance of the issue.

 

Estevan Perera

“I do believe there is a need for increased regulations, in terms of an ability for persons wronged to have an avenue to report what’s being done to the licensing authority – the persons who grant these licenses; perhaps that’s one of the most important things that can be done. At this point, we understand that most of the licenses are granted by the Magistrate’s Court, but they a report and permission from Central Bank. I understand that now Ministry of Finance is going to be involved as well in the application for the moneylenders’ license; so I believe that one thing we can do, and perhaps the Government can do, is to create a mechanism where reporting by persons who don’t have the ability to hire attorneys, can send a note or report what’s being done to them, if what is being done is contrary to what’s contained in the law.”

 

Personal and social circumstances, Arthurs asserts, are at the root of this growing problem. His client was just one example.

 

Kevin Arthurs

Kevin Arthurs

“I was sharing with one reporter earlier today that there is a direct connection between some of the things we are seeing, some of the social problems that we are having, for example, crime, and money. Take for example, a situation where somebody borrows – somebody who doesn’t have education and doesn’t have means, very poor – they fall into a situation where they have to go to the pawnshop, they leave something there which is very expensive and they get a big loan and they have to pay it back – how do you think that person is able to service a two hundred and forty percent interest loan? They rob. So what this does in a very kind way is to try to put the balance of power back so that we can have peace and a stable society. It may sound like a bit of hyperbole, but it is these very small things. If somebody is not desperate, if your health care system was solid that they don’t have to go to borrow – in this case the borrower had lost an eye, and so they went in there to pay medical bills; if they didn’t have to pay those medical bills, then they wouldn’t have had to go to the pawnshop. So there is a correlation between the social problems and the predatoryness of what some of the bad moneylenders are doing, because there are some good moneylenders as well.”

 

Aaron Humes reporting for News Five.

 

As we reported on Friday, there is not a high likelihood that the judgment will be appealed by the Blancos and attorney Magali Marin Young, Senior Counsel.

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1 Response for “Fighting Back Against Unscrupulous Moneylenders: Attorneys Have Tips”

  1. concern Accountant says:

    It is time they sue all those money lenders. They bave enrich themselves in a lucrative manner.

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