It was a decision made under extreme financial duress that still haunts her months later.

From Bangkok to Kuala Lumpur, Jakarta to Ho Chi Minh City, many Southeast Asian households are battling a severe debt crisis ignited by the shock of the pandemic, but exacerbated by surging global inflation that has driven up prices of everything from eggs and noodles to petrol.

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‘They will punish you’: Malaysian’s death connected to internet scam in Thailand

‘They will punish you’: Malaysian’s death connected to internet scam in Thailand

Coronavirus restrictions saw tourism vanish, vital remittances from migrant workers wiped out and garment factories closed for endless months – a sector staffed by women and worth around one-quarter of Cambodia’s entire economic output.

But in crisis lurks opportunity for loan sharks, who have found an ever-growing pool of people needing fast cash but without the assets to secure a formal loan from a Cambodian bank.

Like many other debt-saddled middle classes sliding back down the economic hierarchy, Vanna soon found herself with nowhere to turn apart from Loanly.

But after reluctantly sending the naked images to the agent, Loanly only released US$500, she says, deducting the other half of the loan to cover advance interest payments on money she had only partly received.

Deeper and deeper in trouble – and now burdened by two expensive loans – Vanna had little choice but to double down, taking out another US$1,000.

Loanly charged 20 per cent interest per week, doubling it each week to reach around 80 per cent of the loan value for every month unpaid.

That is illegal under Cambodian Law, which states registered lenders and banks can only charge a maximum interest of 1.5 per cent a month or eighteen per cent a year.

Ruthless strategy

But with an ocean of customers – and social media as their weapon – hunting has never been so easy for Cambodia’s loan sharks. Loanly Internet, which victims say is run by Malaysians and Chinese, is one of a constellation of online money lenders targeting people through Facebook and Telegram with names like ‘Monkey Loan’ and ‘Happy’, and ‘Tiger and Lion Loan’.

Some vanish from app sites as soon as authorities investigate them – and reappear under new names. But they all run versions of the same ruthless strategy: dangling quick cash then using intimidation and extortion to quadruple their money.

“When I failed to pay the loan on time, they sent my nude picture and the video to my 16-year-old daughter and my 14-year-old son,” Vanna said.

That was early August. In the weeks since, Vanna says her children have treated her with increasing disrespect and distance.

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LICADHO, a prominent human rights organisation, has published a report warning of the perils of loan sharking in the post-pandemic economy. It said several Cambodian women they had spoken to were cajoled by ‘Loanly Internet’ into sharing naked images of themselves to secure the loan.

“These women were severely affected by the (extortion) threats,” the report said. “Some felt suicidal and anxious for their marriage or the safety of their children.”

Meanwhile, Loanly Internet has disappeared from local app stores but remained active on social media platforms.

Cambodia’s General Taxation Department said online loan companies need a licence to operate from the National Bank of Cambodia.

“I have no record or tax registration of the above companies,” the department’s head Kong Vibol told This Week in Asia, adding that he was investigating the firms and would “take action” once they established who was behind them.

Fool me once

According to Cambodia’s director of technology crime department Chea Pov, victims of online loan sharks are often too embarrassed to lodge police complaints.

Registering a fraud with NGOs does not help them bring a case against the fraudsters, he said.

“We need the evidence. But if they don’t submit it, we can’t do anything,” said Pov, who added that most victims were unwilling to share the images they had given to the loan sharks as insurance against the funds.

But the unscrupulous loan sharks are not having it all their own way.

A network called ‘Virtues of Life’ has brought together over 100 female victims, sharing horror stories of debt, threats and the extortion tactics used by the loan sharks and building a body of evidence against the illegal companies as they emerge.

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One borrower, who wanted to be known as Sar Pisey, showed This Week in Asia a video call she recorded from a Loanly Cambodian agent demanding an extra payment of US$3,000 in addition to the US$2,000 interest she had already paid on a US$6,750 loan.

“I had paid over US$8,000 in two months,” she said. “I told the agent she can come and talk to me face-to-face and that I was ready to face any lawsuits they tried to bring,” she said, adding that a Malaysian boss took over the call screaming threats at her.

Other members of the network have similarly gathered evidence and recorded the calls, as a small movement of refuseniks begins to gain ground.

In a sign of a pushback by some members of the Cambodian public, Kandal provincial police on September 1 arrested two men over alleged loan fraud under the company name ‘Diaman 55’. One was a translator for the firm from Cambodian, while the second was a 41-year-old Malaysian national, police said, adding the case was cracked by evidence from a victim.

For Vanna, online borrowing taught a cruel lesson, by a company exploiting her vulnerability as a breadwinner in a time of financial crisis.

Instead of relief from her impecunity, she says she now also faces the daily pain of a mother shamed in front of her children.

“My life has got worse since I borrowed the money,” she says. “No one in my family wants to talk to me any more.”