What Is “Black Credit”? Signs and Legal Handling

Short answer: “Black credit” is not a legal term but a colloquial expression for lending outside the licensed credit institution system, often accompanied by exorbitant interest rates and debt collection through threats and extortion. The law addresses these acts mainly through the crime of usury in civil transactions (Article 201 of the Penal Code) and administrative sanctions. Borrowers who are victims have the right to report to the police and request protection.

Legal basis

• Law on Credit Institutions 2024 (No. 32/2024/QH15, effective from 01/7/2024) — only licensed credit institutions may conduct banking activities, including lending;
• Article 201 of the Penal Code 2015 (amended and supplemented 2017) — crime of usury in civil transactions;
• Clause 1, Article 468 of the Civil Code 2015 — agreed lending interest rates must not exceed 20%/year.

Signs of “black credit”

• Lending without collateral, quick disbursement via apps, social networks, flyers;
• Actual interest rates far exceeding 20%/year, plus vague “fees”;
• Sloppy contracts or no contract at all; holding the borrower’s identity documents;
• Debt collection through threats, defamation, asset extortion — these are independent criminal law violations.

Legal sanctions

• Criminal: A lender charging interest at 5 times or more the maximum rate prescribed by the Civil Code (i.e., 100%/year or more), gaining illicit profits of VND 30 million or more, may be prosecuted for usury in civil transactions;
• Civil: The portion of interest exceeding the 20%/year cap is invalid;
• Administrative: Unlicensed lending activities may be subject to administrative sanctions in the monetary and banking sector;
• Threats and asset extortion during debt collection are handled under the corresponding crimes in the Penal Code.

What should “black credit” victims do?

1. Collect and keep all evidence: messages, contracts, transfer statements, recordings of threats;
2. Report to the police where they reside or where the unlawful debt collection occurred;
3. Do not sign additional disadvantageous documents under pressure; may request the Court to declare the portion of interest exceeding the cap void;
4. Consult a lawyer before working with the authorities to protect their rights.

If you need to determine the option best suited to your specific situation, you should discuss it with a lawyer in advance for dossier review and advice on the handling plan.

For quick advice, you may contact a lawyer at 0966.475.966.

Related articles

• What is the interest rate when one enterprise lends to another?
• Asset loan contracts under the Civil Code
• Where to report the crime of usury?