Italians Fall Victim to Extortionate Loan Practices as Recession Bites

Some victims of usury pay as much as 1,000 percent annual interest

LAW enforcement agencies, businessmen's associations, clergy, and the press are making common cause on loan sharks, who are flourishing throughout Italy these days.

Usury has reached staggering proportions in the last couple of years, with an estimated turnover of 5 trillion lira ($3.2 billion). At least 8,000 usurers are said to be holding more than 4 million Italians hostage to loans made at annual interest rates from 100 percent to 500 percent.

``This crime is very widespread, not only in Rome but throughout Italy,'' says Angiolo Marroni, president of the Crime Commission of the Lazio region, in which Rome is located.

Conservative banking practices, a recession that has Italians worried about the future, and the resultant collapse of consumer spending and of liquidity figure prominently among the causes of the problem, experts say.

In many cases, small businesses can't get banks to approve a loan, explains Vincenzo Alfonsi, the Rome secretary of the Confesercenti small businessmen's association. Banks often ask for between five and 10 times the amount of the loan as collateral, he says, ``and not everyone can offer these guarantees.''

Nor, he adds, do they always feel they can wait the four to six months it can take for a normal credit application to be approved, especially when loan sharks - who appear to the businessmen, at this point, as practically their saviors - can provide the desired money the same day.

About 15 percent of Rome's small businesses have fallen prey to loan sharks, Mr. Alfonsi says.

The phenomenon takes a devastating human toll. Recipients of the loans are made to feel guilty when they cannot pay. Rather than perceiving themselves as victims, they feel they are not holding up their end of a contract.

``The only way to get out of it is to report it to the police, but often they're afraid,'' says Alfonsi, whose Confesercenti organization runs a hot line that victims can call for counseling. ``I received the latest call yesterday. A man said: `I'm afraid to report it. I've left Italy with my family.' ''

In other cases, a woman prostituted herself and a young Neapolitan disc jockey put an advertisement in the newspaper to sell a kidney in order to meet their payments. Victims have even committed suicide.

Several law enforcement agencies, businessmen's associations, and church figures have set up hot lines like that of Confesercenti, but by the time the majority of victims call, they are overcome with desperation and shame, the organizations report.

Userers apparently are annoyed by support activities for their victims. At a quarter to midnight in the southern city of Matera one evening this month, a bomb exploded, damaging the Church of Sant'Agnese. Father Basilio Gavazzeni, the church's priest, does support victims. He told the press that he knew of cases in which people were being asked to pay 1,000 percent annual interest.

Naturally, the crime is not carried out by small-time criminals alone. On the island of Sicily, usury is dominated by the Mafia and, in the region around Naples, it is controlled by the Camorra organized crime group.

When loans come from the mob, the usurer's purpose, generally, is not to extract exorbitant sums of money from the victim but to take possession of the victim's property, when he or she falls behind in payments, says Mr. Marroni of the Lazio Crime Commission.

Convicting loan sharks is not easy. Italy's present laws against usury are considered inadequate. For one thing, they define usury as loaning money at high interest rates, without specifying what is meant by ``high.''

And usury can be difficult to prove, since both parties entered into the agreement consensually in the beginning.

``It's an extremely particular crime,'' says a member of Rome's Confcommercio, a group representing modern businesses.

What's needed, crusaders say, is a law that defines usury - for example, as a loan made at more than double the prime rate - and stiffer penalties for loan sharks.

It is something that Marroni of the Lazio region's Crime Commission is hard at work at. He heads up a research project that aims to determine when a loan is, in fact, usury, which legal entity should be the competent authority for trying loan sharks, what procedures should be adopted to combat loan sharking, and what to do about bank policies.

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