Credit collections scheme leads to arrests, license suspensions
Story Highlights
- Many victims were from economically vulnerable groups and were collectively defrauded of millions of euros.
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TIRANA, May 26, 2024 – An Albanian court has ordered the arrest of several individuals in connection with a credit collections scheme that allegedly defrauded thousands of citizens.
According to the prosecution, a non-banking lender and collection enforcement companies orchestrated a coercive scheme that used manipulative tactics to force debtors to take out new loans, blocking their salaries, properties, and vehicles to ensure repayment.
The lender had originally purchased non performing loans from a commercial bank.
These unlawful activities by three enforcement companies, one non-bank financial institution, a law office, a notary, and other associated individuals have caused significant financial harm to thousands of citizens.
Many victims were from economically vulnerable groups and were collectively defrauded of millions of euros.
The involved companies — Zig, STAR/FS, Flash, Micro Credit Albania, and ADCA — acted as a single entity, enforcing debt repayment through new loans, benefiting the non-bank financial institution Micro Credit Albania (MCA), according to the prosecution’s materials sent to the court.
MCA is suspected of using theft to liquidate purchased loans, coercing creditors to take new loans to unblock their old ones, perpetuating control over these debts. This scheme resulted in severe economic damage to many citizens and entities.
The Bank of Albania has revoked the licenses of the implicated financial institutions, Micro Credit Albania and Final, following the court’s arrest orders for their shareholders.
BoA Governor Gent Sejko confirmed the revocations, emphasizing the unethical conduct and ongoing criminal proceedings against these individuals.
Governor Sejko highlighted that MCA had faced numerous inspections and sanctions from the Bank of Albania, including the suspension of its lending activities.
The investigation continues as authorities work to address the extensive financial damage inflicted by this fraudulent collections scheme.
