Poor credit records and ignoring court orders for more than six
months will result in people being barred from purchasing property,
securing bank loans and getting employment, the Shanghai Higher
People's Court has announced.
The new blacklist of the city's credit and banking system will
help businesses and banks reduce their risks.
Thee Shanghai courts deal with about 80,000 litigations and
prosecutions every year. Of the total 10 percent don't pay
compensation or the penalties imposed though they're in a position
to do so. A businessman in Minhang District delayed paying 40,000
yuan (US$5157.6) in 2004 although he lived in a luxury villa
with a pool.
To implement the verdicts the courts will work with Shanghai's
credit system and ensure violators are blacklisted and get shown
the door wherever they go seeking credit.
Shanghai Higher People's Court signed an agreement with the
Credit Information Services Co, a firm funded by the Shanghai
municipal government, in 2004 to hold the credit records of
over 4 million people or a quarter of the city's population,
the Shanghai Morning Post reported.
In 2006 Shanghai Higher People's Court signed agreements with
banks and several financial institutions to provide the blacklist
on request.
Since then credit reports on 1 million people have been
forwarded to various enterprises. They can use the system to check
the credit record of an individual before offering a loan or
employment.
Linking individual records to the credit and banking systems has
helped improve implementation of the verdict, the court said.
A man surnamed Chen who delayed paying a bank bill of 600 yuan
(US$77.3) and ignored the court order was turned down
when he tried to get a loan to buy property. He paid the bill after
realizing he'd been blacklisted. He got the loan only after paying
the bill and getting his name removed from the list.
The arrangement has also helped courts check litigants' credit
rating and freeze their accounts if necessary. "We plan to extend
the list to more credit systems," said Gao Wanquan, a judge
with Shanghai Higher People's Court.
(China Daily February 6, 2007)