Last week, the financial sector faced a major controversy after CLICX, a newly launched branchless bank, began accepting online loan applications but had to temporarily suspend the system within just one or two days. This occurred after some "debt defaulters" posted in groups claiming that even those with poor credit could borrow through the app and then default on their loans without consequences.
Although the exact reasons why these debt defaulters believe they can borrow without repayment remain unclear, Thairath Money invites readers to examine common financial misconceptions about debt to avoid falling into these traps.
1. Loans through digital apps without branches mean creditors can’t enforce debt collection.
The reality: Virtual banks like CLICX, licensed by the Bank of Thailand (BOT), must operate and charge interest in compliance with Thai law. Borrowers are obligated to repay their loans, and if they default or engage in fraudulent behavior, the bank will take legal action against them.
Therefore, these apps are not scams or illegal lenders charging unlawful interest rates. Choosing to "default" will result in consequences such as a poor financial record, potentially making future bank loans more difficult.
Note: CLICX is a joint venture involving Krung Thai Bank (KTB), Advanced Info Service Public Company Limited (ADVANC), and PTT Oil and Retail Business Public Company Limited (OR).
2. Borrowing via digital platforms means no debt collection system exists and collection will be slow.
The reality: Many people borrow money through e-commerce apps for purchases ranging from tens to thousands of baht, assuming they can default because collection won’t happen digitally. However, most of these apps are also licensed by the BOT. For example, Shopee’s SPayLater product reports data to the National Credit Bureau (NCB). Therefore, defaults are recorded, including late payments or missed installments.
3. Being listed in the credit bureau means you cannot get loans.
The reality: Being listed in the National Credit Bureau (NCB) is not a loan denial itself. The NCB collects loan and repayment history monthly from member financial institutions.
Loan applications may be rejected if the lender finds the borrower has too many loans relative to income or a history of default. Lenders have the right to decide whom to lend to, and under Bank of Thailand regulations, if a loan is denied, the bank must clearly explain the reasons.
4. Unsecured loans without collateral mean creditors cannot take any action.
The reality: Unsecured loans, such as credit cards, personal loans, or cash cards, require no collateral at the time of borrowing.
However, if the borrower defaults, creditors can sue. If the borrower refuses to pay, negotiate, or restructure the debt, and the creditor wins a court judgment, the court can seize or attach the borrower’s assets registered in their name. This may include property and, in some cases, salary garnishment (for private employees earning over 20,000 baht). Court officials from the Department of Legal Execution carry out asset seizures to sell and use proceeds to repay creditors.
5. Failure to repay debts results in imprisonment.
The reality: Debt obligations from borrowing are civil matters, not criminal offenses. Therefore, defaulting on loans does not result in arrest or imprisonment, except in cases involving fraud or financial document forgery, such as knowingly issuing bad checks, which are criminal offenses.
This question is common, so we consulted Athip Sinpajikan, CEO of Ayudhya Capital Services Company Limited, who told Thairath Money that when borrowers fall behind on payments, financial institutions follow legal debt collection procedures such as:
(Note that each company and loan product has different legal terms; borrowers should verify details carefully.)
Each financial institution, whether a bank or non-bank, has its own debt collection policies and timelines but must comply strictly with the Debt Collection Act, as mandated by the Bank of Thailand’s Market Conduct standards. Non-compliance can lead to criminal and civil penalties, such as for aggressive debt collection or physical abuse.
“Once the debt becomes non-performing, providers may initiate lawsuits to recover payments, regardless of whether the overdue amount is in the hundreds, thousands, or hundreds of thousands, depending on company policy,” Athip explained.
After legal action, options include negotiating with the debtor, asset investigation and protection, and asset seizure or wage garnishment. All these require a court judgment. Salary deductions are regulated to ensure borrowers retain enough for living expenses.
Ultimately, from an honest perspective, “borrowing money entails the responsibility to repay.” Creditors must collect debts to sustain business liquidity, but unfair debt collection can be legally challenged. For questions or problems regarding loans or debts, consult the Bank of Thailand at Call Center 1213 orhere.
SourceBank of Thailand (BOT),CLICX
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