Opening remarks

For 32 years, Jinyan Law Firm has been in harmony with the tide of the rule of law, using professionalism as its sail and craftsmanship as its oar, forging ahead through the vast ocean of legal services. Those moments of arguing one's case in court and those days and nights of unraveling case files have eventually settled into classic cases that are engraved with the warmth of law and the brilliance of wisdom.

Today, with a sense of awe and pride, we launch the "Classic Cases" column. The five cases selected at the 32nd anniversary celebration symposium are a microcosm of the professional accumulation of Jinyan Lawyers. Each case is a precious memory of Jinyan Lawyers fighting side by side with their clients and a vivid interpretation of the spirit of the rule of law. In the next five issues of classic cases, we will lead you into the stories behind these cases, allowing you to experience together how legal provisions can be transformed into sharp swords for safeguarding rights and interests, and witness the judicial wisdom that integrates emotion, reason and law.

After the implementation of the "Amendment (XI) to the Criminal Law", for Changes in the application of law for illegal debt collection practices

From March to September 2024, Zhang Shuaishuai, a lawyer from Jinyan Law Firm, represented a criminal case in which a "loan trap" fraud was carried out through a P2P lending APP and illegal collection was conducted after the loan.

Basic case details

This criminal gang first used online lending apps to lend money to unspecified members of the public and charged high interest rates. Then, after the borrower failed to repay the loan on time, the collection team organized collection personnel to repeatedly harass the borrower through wechat, text messages, phone calls and other means, using soft violence methods such as harassing the borrower's contact list of relatives and friends, sending obscene and malicious PS pictures of funeral halls, and sending abusive and threatening text messages, which led to the suicide of three borrowers. During the trial, the case-handling authority held that the implementation of the Criminal Law Amendment (XI) specifically stipulated the crime of collecting illegal debts. Therefore, the above-mentioned illegal collection behavior was ultimately convicted and punished for the crime of collecting illegal debts, rather than applying the previously commonly used crime of provoking trouble for conviction and punishment.

Case Analysis

From the above cases, it can be seen that the implementation of the "Amendment (XI) to the Criminal Law" on March 1, 2021, marks a new stage in the criminal regulation of illegal collection activities in our country. The addition of the crime of collecting illegal debts not only fills the legislative gap but also has a profound impact on the application logic of criminal charges in judicial practice. From the above cases, it can be seen that the judicial authorities have adjusted the same illegal debt collection behavior from the crime of provoking trouble to the crime of collecting illegal debts, which reflects the strict application of the principle of "applying the old law and the lenient one" in the transition between the old and new laws. At the same time, it also reveals the transformation of the criminal law's evaluation system for illegal debt collection behavior from "generalized crackdown" to "precise regulation".

Before the implementation of the Criminal Law Amendment (XI), illegal collection activities were usually classified as crimes such as provoking trouble, unlawful detention or illegal intrusion into a residence. For instance, those who use means such as harassment and intimidation to collect usurious loans, due to their actions having the characteristic of disrupting social order, are often identified as having committed the crime of provoking trouble, and the maximum statutory penalty in the first tier can reach up to five years of fixed-term imprisonment. However, there is a bias in the evaluation between such charges and the specific context of the collection behavior: The crime of provoking trouble emphasizes "creating trouble out of nothing" or "creating trouble under false pretext", while the collection of illegal debts often involves a clear creditor-debtor relationship (even if it is illegal), and the motive for the behavior has a specific purpose. Simply applying the crime of provoking trouble may lead to a mismatch between the crime, responsibility and punishment. In the above-mentioned cases, the defendants resorted to intimidation and harassment to collect high-interest loan debts. If they had been convicted of provoking trouble under the old law, they might have faced a more severe punishment. However, after the new charge was defined as the crime of collecting illegal debts, the upper limit of the statutory penalty was reduced from five years to three years, which is more in line with the principle of proportionality.

The addition of the crime of collecting illegal debts is essentially a legislative confirmation of the independent legal interest protection for illegal collection activities. This crime clearly defines "illegal debts" as those not protected by law, such as high-interest lending and gambling debts, and further categorizes collection methods into three types: violence, coercion, restriction of personal freedom, intrusion into residences or intimidation, stalking and harassment. This regulation makes judicial evaluation more refined: on the one hand, it distinguishes the collection scenarios of legal and illegal debts, avoiding the over-criminalization of self-help behavior; On the other hand, by listing specific behavioral patterns, the judicial arbitrariness caused by the ambiguous selection of charges in the past is reduced. For instance, in the 141st issue of "Criminal Trial Reference", case No. 1620, the defendant Dai Moulong used coercion, harassment and other means to collect illegal debts arising from high-interest lending. In the second instance, the Shanghai No. 2 Intermediate People's Court applied the principle of "applying the old sentence and choosing the milder one", changing the first instance judgment of the crime of provoking trouble to the crime of collecting illegal debts, and reducing the sentence from two years and six months to two years.

The application of the principle of applying the old and the lenient is particularly crucial in such cases. According to the relevant provisions of the Criminal Law, for cases during the transition period between the old and new laws, if the new law imposes a lighter penalty, the new law should be applied. The maximum sentence for the crime of collecting illegal debts (three years) is significantly lower than that for the crime of provoking trouble (five years). Therefore, even if the act occurred before the amendment came into effect, as long as the new law has been implemented at the time of trial and the act meets the constituent elements of the new crime, it should be convicted and sentenced under the new charge. In the two cases mentioned above, although the suspects carried out illegal collection activities before the implementation of the amendment, as the trial time was after the new law came into effect, the courts ultimately determined the charges under the new law, which is precisely the implementation of this principle. It is worth noting that if the collection behavior also meets other serious crimes (such as illegal detention causing serious injury), it may constitute an imagined concurrencism, and the more serious crime must be punished. At this time, the lenient nature of the new crime may be overridden by other charges.

The change in the application of this charge also has a significant impact on criminal defense strategies. During the defense process, lawyers need to focus on two aspects: the first is the criteria for identifying "illegal debts". According to judicial interpretations, illegal debts not only include usurious loans exceeding the legal interest rate (such as an annual interest rate exceeding 36%), but also illegal debts like gambling debts and drug funds. If the debt collected is divided into principal and legal interest, it is necessary to distinguish between the illegality of the means and the legality of the debt. This crime is only applicable to the part of the debt that exceeds the legal scope of collection. The second is the matching of behavioral means. For instance, if simple phone harassment does not reach the severity of "intimidation or stalking", it may not constitute this crime. Instead, it is necessary to determine whether it constitutes an administrative violation or a civil infringement based on specific circumstances.

In future judicial practice, the application of the crime of collecting illegal debts may be further refined. For instance, in cases involving related crimes such as infringing upon citizens' personal information and extortion, it is necessary to clarify the boundary between concurrent punishment for multiple crimes and imagined concurrencity. The determination of "soft violence" in debt collection requires a comprehensive judgment based on the frequency of the behavior, its duration, and the actual impact on the victim's life. In addition, legislators have implemented a tiered system of crimes and punishments by adding minor crimes. This not only avoids the previous "one-size-fits-all" heavy penalties but also provides clear guidance for the compliance of the debt collection industry - only by asserting creditor's rights through legal channels such as litigation and arbitration can criminal risks be avoided.

In conclusion, the Criminal Law Amendment (XI) has achieved precise crackdown on illegal collection activities and reasonable sentencing through the establishment of special crimes. This change not only corrects the chaos in the application of criminal charges in judicial practice but also returns to the value of criminal law's restraint and human rights protection. For criminal defense, a thorough understanding of the differences between old and new charges and actively advocating the application of the principle of applying the old and the milder offense will become the key path to safeguarding the legitimate rights and interests of the parties involved.

Introduction to lawyers

Lawyer Zhang Shuaishuai, a member of the Communist Party of China, is a practicing lawyer at Jinyan Law Firm and graduated from the Law Department of Zhengzhou University.

I have participated in handling nearly a hundred litigation, arbitration and non-litigation legal service cases, including civil and commercial cases, criminal defense cases and administrative cases. In April 2021, the case of "Kong's Security Guarantee Obligation and Responsibility Dispute" handled by us was awarded as one of the "Top Ten Excellent Legal Aid Cases of the Sixth Session in Jiaozuo City".

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