Russian Debt Collectors’ Reign of Terror


I wrote an article for OpenDemocracy on microloans and debt collector violence. I’ve been mulling the article since January when I read a gruesome story about a debt collector throwing a Molotov cocktail through the debtor’s window severely burning his two year old grandson. A Google news search revealed that though this incident was one of the most tragic, it was hardly exceptional. But the idea sat and so did the saved links.

Then two things happened.

First, was all of the reporting on Putin’s alleged connections to $2 billion in the Panama Papers. Many Western reporters were bemoaning the fact that the Russian federal media wasn’t covering the story and how the details in the Papers revealed the nature of corruption and power in Russia. As usual, Mark Galeotti provided one of the more cogent comments. But besides Mark’s intervention, most commentary read as recycled verbiage salted and peppered with new flashy metaphors.

Second, on April 5, another story sprang up in the Russian press. In the town of Iskitim in Novosibirsk oblast, four masked debt collectors broke into the home of Natalia Gorbunova, beat her husband and 17-year-old son, and then raped her in front of them. Gorbunova had taken a 5,000 ruble microloan in 2014 and now the collectors were demanding 240,000. 

It was the contrast between the global media outcry and analytical mummery about Putin’s alleged billions and the complete silence about what ordinary Russians like Gorbunova have to deal with. But this is always the case. Stories about the Gorbunova’s of the Russia are few and far between. It’s easier to obsess over Putin than to illuminate the complexities of Russian daily life.

I hope that my OpenDemocracy article is a modest contribution to the latter.

Here’s an excerpt:

Media reports of harassment and violence against debtors have become all too common. Most debtors and their relatives are subject to constant harassment —in Stavropol, debt collectors shut down a hospital’s phone system with their constant harassment of a hospital worker over the telephone. Similar incidents have happened in other towns as well. 

Threats and outright violence are increasingly frequent. In January, debt collectors in Ulyanovsk threw a Molotov cocktail through the window of a 56-year-old grandfather, severely burning his two-year-old grandson. The grandfather took a 4,000 rouble ($60) loan to buy medicine; the collectors demanded he pay them 40,000 ($598).

In Krasnodar, a debt collector broke a woman’s finger over a 300 rouble ($4.50) debt payment. In Penza, a 54-year-old woman took a microloan for 30,000 rubles ($448) to, once again, buy medicine. She put her home down as collateral. The collectors now say she owes 470,000 rubles ($7,022), and as a result, they’re to seize her home. In Rostov-on-Don a collector was sentenced to ten months in prison for threatening to blow up a kindergarten if an employee didn’t repay his loan.

In Yekaterinburg, collectors “cut the telephone wires and filled the locks with glue” as they locked a debtor’s child in an apartment. Aleksei Selivanov, a Yekaterinburg lawyer who defends debtors against predatory lenders, was threatened by a group of collectors led by Maksim Patrakov, a former Donbas volunteer fighter. According to the jurist, Patrakov threatened to throw him in a car trunk and murder him out in the forest. The media is filled with these stories.

In some cases, the crushing debt and constant threats and harassment are just too much. The only exit many see from this vicious cycle is suicide.

Read on . . .