QCOSTARICA — Legislators on Tuesday approved in the second and final debate the bill that sanctions the practice of “gota-a-gota” loans (loansharking) with up to 15 years in prison.
Gota-a-gota loans are informal loans provided outside of the traditional financial system, where the terms and interest rates can be adjusted at the discretion of the lender. Debt collectors frequently resort to violence to intimidate, threaten, and harm borrowers who don’t or can’t pay on time.
In many cases, criminal groups and drug traffickers are behind these collections of payments.
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It is estimated that more than 220,000 people currently have outstanding debts with loansharks, according to figures from the II National Debt Survey of the Financial Consumer Office, carried out between September and October 2023.
“Through deception and intimidation of their victims, gangsters increase the interest rates under threat, and those who do not accept may receive a beating, a kidnapping or other violence against them and their family.” said Gloria Navas, legislator for the Nueva Republica party.
The practice of loansharking has been an established criminal method that was prevalent in Colombia and El Salvador in the past years. In Costa Rica, this practice gained attention following the pandemic and the passing of the usury law in 2020.
The latter was an inadvertent catapult for this criminal modality, since by establishing an interest rate limit for the entire formal credit system, more than 300,000 people were automatically excluded from the legal loans given by banks, cooperatives, mutuals and others, and in their place, criminal groups flourished.
Read more: “Usury Law” has left the country more vulnerable to loan sharks, a key factor in insecurity
“Not only here, but also in Colombia, El Salvador, and the rest of Latin America, when there are caps on interest rates, the riskiest clients, who the banks cannot finance, end up little by little falling into the hands of loan sharks,” said Gerardo Corrales, economist at Economía Hoy.
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Given this scenario, lawmakers, the government, and the judiciary advocated for a change in the legislation to impose severe penalties for this particular offense.
The punishment also establishes penalties of 4 and 8 years in prison for anyone who uses threats or intimidation personally, through third parties or by any means of communication, in order to force a debtor or his family to pay the loan; from 5 to 10 years when these threats or intimidation are directed at a minor, a senior (65 and older) or any person in a vulnerable condition.
Likewise, it will be aggravating if the act is committed by two or more people, if there is physical or psychological aggression towards the victim, if it includes the use of a weapon or if it causes damage to property.
The maximum penalty of 15 years will be applied when the practice is linked to organized crime.
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