|Triple Suicide Forces Japanese To Face Menace Of Loan Sharks
By Peter S. Goodman and Akiko Kashiwagi
Washington Post Foreign Service
Saturday, July 19, 2003
OSAKA, Japan -- By the time Akiyo Nishihira squatted on the tracks with
her husband and her elderly brother in the path of an oncoming train, the
loan shark had been calling nightly, demanding payment and sometimes
threatening to kill her. He had been calling the takeout lunch stand where
she worked, and the factory where her husband mopped floors. Calling her
neighbors, profanely insisting that they must pay in her place.
"Every night, I am scared of the telephone. My husband and my brother feel
sympathetic and have decided to die with me," Nishihira wrote to a
neighbor from whom she had borrowed more than $2,000. She applied neat
Japanese script to her pink, lined stationery, then wrote the address in
calligraphy. "I cannot pay you the remainder. Please forgive me, truly. I
cannot apologize enough. I will apologize with my death."
The triple suicide last month at a rail crossing in Osaka, Japan's
second-largest city, has riveted public attention on the increasingly
widespread crime of loan-sharking -- usurious lending, at annual interest
rates in excess of 6,000 percent. Such predatory finance has grown
dramatically during Japan's years of economic malaise, fueled by spiraling
debt loads and the expansion of organized crime syndicates into the
lucrative trade, according to police and lawyers who handle such cases.
For such lending to be happening at all in Japan seems perverse. Over the
past several years, the central bank has cut interest rates effectively to
zero in a bid to revive the world's second-largest economy. Growing
reliance on loan sharks highlights how millions of households have fallen
so desperately into debt that they have been left out of this low-interest
bonanza. Personal bankruptcies have quadrupled over the past decade as
wages have fallen, bonuses have been cut and businesses have closed their
doors. Many households have such poor credit that no legitimate lender
will extend a loan, yet they are suffering such a crunch that they are
willing to take on absurd rates of interest to stave off collapse.
Last year, more than 122,000 Japanese -- more than 11/2 times as many as
in 2001 -- called authorities for help after borrowing money from loan
sharks or turned up on customer lists when police raided lending
operations, according to the National Police Agency. Experts estimate that
the real number of victims exceeds 1 million, with most failing to report
cases out of fear and embarrassment. In Tokyo, more than 900 people ran
away from jobs and families last year to escape the terror of collections
by loan sharks, according to city police.
The fear reflects who is involved. Roughly one-fourth of the lenders are
linked to violent crime syndicates known as yakuza, according to the
National Police Agency, but a Tokyo-based lawyer who heads a group that
advises victims of loan sharks nationwide, Kenji Utsunomiya, puts the
number far higher. "They are behind the scene," he said.
The triple suicide in Osaka on June 14 has injected urgency into the
debate over a bill in Japan's legislature, the Diet, that would tighten
the registration process for lenders while imposing penalties of up to $1
million on anyone caught exceeding legal interest rates. The proposed law
would also increase the maximum prison sentence from three to five years.
Police in major cities, including Tokyo and Osaka, have established task
forces to investigate and prosecute violators.
Loan sharks have become the last resort for a society already saturated
with legal lending institutions for those with bad credit. "Consumer
lenders," who dispense cash using automatic teller machines, can approve
loans within an hour by telephone, with the interest capped at 29 percent.
As wages have fallen in Japan in recent years, consumer lenders have
proliferated in every city, and are advertised on subway placards, in
tabloid newspapers and on tissue packs handed out by touts on the street.
Once a borrower defaults on payments to a consumer lender, his name lands
on a blacklist that circulates among other such institutions. The lists
are then sold covertly to loan shark operations and shared among them,
according to police and lawyers. The loan sharks also comb lists of
personal bankruptcies published by the government, adding to their
databases. They use these lists to target people in need.
The typical pitch is by phone. "Someone calls, and they say, 'It looks
like you're in a difficult situation,' " said Yoshino Yamazaki, who
advises victims at a center in Saitama, an industrial enclave north of
Tokyo. " 'Wouldn't you be interested in borrowing?' "
The head of a construction company in Saitama said he began getting mail,
daily phone calls and visits from men dressed like bankers after he had
trouble making the payments on a loan from a finance company. At first he
demurred. But when a building project was delayed in February, crimping
his cash flow at the same time that he needed to buy materials, he gave
He visited the office of the men who had come to see him.
"When I opened the door, I immediately sensed that this was not a normal
office," he said, speaking on condition he not be named for fear of
retribution. Many of the men inside had shaved heads, and wore flashy silk
shirts and Rolex watches.
The touted rate during the pitch had been 29 percent, he said. Now, they
changed the terms, offering a loan of about $4,000 to be paid back in two
weeks with $1,000 tacked on as interest. He declined and began to get up
to leave. Three men stood over him insisting that he "compromise," he
said, adding: "I was scared. And I needed the money."
An hour later, he had affixed his name stamp -- the Japanese equivalent of
a signature -- to a stack of papers authorizing the $4,000 loan with $500
in interest to be paid back after two weeks. He had also handed over his
telephone numbers and those of friends and relatives to serve as
When he was unable to fully pay off the debt, the loan shark activated
clauses in the contracts authorizing new lending on tougher terms. Other
loan sharks began calling him to solicit new loans just as the old ones
expired. With no other way to pay on schedule, he submitted.
According to the lawyers who handle such cases, this is typical fare. Loan
sharks act in collusion, sharing data on customers and targeting the most
vulnerable for new loans.
Eventually, the interest due grows so high that even compliant borrowers
cannot keep up. Once-sympathetic phone callers quickly turn malevolent,
making threats of bodily harm and warning of disclosures to neighbors and
relatives. Police and lawyers could not recall a case of actual violence
being dispensed, but men dressed like gangsters sometimes visit people to
sow fear, they said.
The construction chief said he received phone calls and faxes at work and
at home threatening to tell his parents and friends about his troubles.
One night, after midnight, he was awakened by a telegram delivered to his
door demanding payment. It came in a shiny black box with a flower, the
typical packaging for a note of condolence.
In June, he sought help at the Saitama center and was advised that the law
prescribes debt forgiveness after the principal is paid back plus the
legal amount of interest. He stopped paying. By then he had handed over
$9,000, but the loan sharks claimed he still owed $21,000 -- all for an
original loan of $4,000.
A phone call from a legal aid group on behalf of a victim is generally
enough to stop the barrage. Sometimes, as in the case of the construction
chief, advocates are even able negotiate settlements in which the loan
shark returns money rather than face the prospect of a lawsuit or
"They don't want to be raided by the police and lose all their customer
information," said Toshio Yamazaki, a volunteer at the aid group. "What
they are doing is outrageously profitable and they would rather not waste
time. They can find numerous other suckers so easily."
Osaka, a manufacturing city now suffering as production shifts to China,
has proven particularly fertile ground for loan sharks.
Nishihira and her husband occupied a ground-floor apartment -- two rooms
with tatami mats on the floors -- in a complex constructed by the
government in the 1960s for laid-off coal miners. Today, it is
all-purpose, low-income housing. White paint peels off rusted railings,
underwear hangs from plastic drying racks and grimy mops poke out of
kitchen windows. On one side sits a paint factory, on the other an oil
refinery. In every direction, the sound of sawing, hammering and clanging
fills the air.
Nishihira and her husband moved there in 1985, the year they were married.
They were already in their fifties and childless. He worked as a janitor
and drove her to her job at the takeout stand in their four-door white
Nissan sedan with teddy bear seat cushions. She dressed neatly, favored
bright colors and spoke formally. On holidays, she handed out origami
greeting cards she made herself.
But the Nishihiras' quiet routine masked deepening troubles, relatives and
neighbors said in interviews. About three years ago, Nishihira's husband,
who was 61 when he died, fell at work and had to be hospitalized. After
that, he walked with a limp and required constant medical attention. About
the same time, he bought the car, despite her opposition.
"She felt it was more of an expense than they could handle," recalled
their neighbor, Akiko Yamashita.
Nishihira's older brother was also not well. Last year, as he turned 80,
he was hospitalized with an intestinal problem, according to another
brother who lives in a different part of town. Nishihira, who was 69 when
she died, was close to her older brother. She helped him pay his bills and
often visited him, taking him food.
Caring for these two aging men, their medical bills mounting, she began to
show strain. Her once round-face became gaunt, neighbors said. Her
federally subsidized rent was a mere $150, but she was usually late with
it over the past two years, said the complex manager, Yasuyuki Tsuji.
"She was very embarrassed," Tsuji said. "She would wait until no one was
around to come in and tell me. Usually she came with a note. 'I'm going to
pay the rent on such and such a date.' She usually did." He liked her --
one of her greeting cards still hangs above his desk -- and he gave her a
Nishihira had already maxed out on credit from the consumer lenders when,
at the beginning of April, she borrowed 15,000 yen, or about $127, from a
loan shark based in Tokyo, according to an officer at the Yao police
station in Osaka. She would later go there to report her trouble.
On April 22, Nishihira and her husband knocked on the door of their
neighbor, Yamashita. They needed money. Nishihira had borrowed relatively
small amounts from her before, $150 or so. This time she asked for more
"She said she needed it for a car inspection and mentioned that she was
also having some trouble with loan sharks," Yamashita said. "I asked her,
'Why are you dealing with these people?' and she said, 'There's no other
way.' She was very depressed and worried."
Yamashita complied. "I just thought for her to come and plead for money in
this way, they must be in an extraordinary situation and I must help."
Meanwhile, Nishihira was also borrowing from more than a dozen other loan
sharks, in the typical spiral of debt that would lead to her paying out
more than $16,000 in interest, according to a report in the Yomiuri
On May 12, she visited the police station to plead for help. She had
already paid out more than $800 in interest on the initial loan, she told
the police, but it was not enough. The first loan shark was calling her
The police told her she did not have to pay and later called the loan
shark on her behalf, warning that further threats would constitute a
On June 9, Nishihira penned her farewell letter to Yamashita.
"I have fallen prey to a malicious con man," she wrote. "I'm the most to
blame because I'm the one who went to that sort of place." She still owed
her friend about $1,300. She included the name and phone number of her
husband's job, suggesting some of the money could come out of his final
The next day, Yamashita received a call from a loan shark in Tokyo who
asserted that she was Nishihira's guarantor and had to pay. While she was
on the phone, Nishihira came to her door, frantic. She had just gotten off
the phone with the loan shark herself, and knew he would be calling her
neighbors. She grabbed the receiver. "Why are you calling her?" she
screamed into the phone.
On the evening of June 13, Nishihira slipped an envelope into the mail
slot of the housing complex manager. A letter, plus the previous month's
rent in cash, late for the last time. "Dear Mr. Landlord," it read. "I
can't pay more than one month. Please forgive me. Thank you for taking
care of me."
After darkness, Nishihira, her husband and her brother went together to
the railroad crossing near the Yao police station. It was five minutes
after midnight when they dropped to the ground, pressed themselves
together and waited for the train.