Crushing Debts, Faked Signatures, and Suicide

How loan sharks have ripped off thousands of Paraguayans.

Grand automatic theft: Paraguay’s credit mafias seemed untouchable, until now. (Image: Microsoft Designer)

Last November, the lawyer Jorge Rolón Luna took to social media to denounce a sweeping fraud scheme encompassing judges, court officials, law firms, moneylenders — and as many as 17,000 innocent victims.

The so-called mafia de los pagarés (credit mafia) operates by taking advantage of the financing agreements through which many Paraguayans purchase items like televisions and fridges through payments discounted from their monthly paycheck.

When debtors fall behind with their instalments, companies are entitled to file claims with local magistrates’ courts (Juzgados de Paz) to pursue the money. Court officials known as ujieres are then supposed to inform the accused.

But in many of the cases in question, this never happened, with the clerks often falsifying official notifications. And according to Rolón, lawyers representing household goods firms have unfairly extended these loan agreements — or even faked them outright — to skim money off the salaries of unsuspecting workers.

The result: judges indefinitely embargoed a portion of victims’ salaries without their knowledge — and without giving them the chance to defend themselves in court.

“It’s a travesty of justice,” Rolón, also a university lecturer and sometime congressional candidate, tells The Paraguay Post. “While the credit mafia took relatively small sums from individuals, we’re talking about a large-scale operation.”

Senator Rafael Filizzola, who heads up a congressional committee created in April to investigate the case, tells the Post that upwards of 4,000 people have been affected, with some “paying off” the same small loans for decades.

He mentions the case of an Indigenous teacher from the Chaco who bought a bed in 12 instalments of 130,000 guaraníes ($14). To date, Filizzola reports, he has forfeited over fifty million guaraníes ($7000) from his salary.

“In other cases, victims have paid between a hundred million or two hundred million guaraníes ($14,000 to $28,000)”, the senator adds: equivalent to over three times Paraguay’s annual minimum wage.

Cashing in, checking out

The scandal — which has been splashed across national headlines for months as the number of reported victims swells — lays bare how defenceless Paraguayans are against abuses by the private sector and corrupt judicial authorities.

“We’re talking about 17,000 people affected,” says Pedro Coronel, a spokesman for the Coordinadora de Víctimas de la Mafia de los Pagarés. “Fifteen people have already taken their own lives because of it.”