Bulgaria Pawn Shop Scam Uncovered in Stara ZagoraCrime | January 23, 2010, Saturday // 12:19| views
A scam run by a Stara Zagora pawn shop that tricked some 80 people into handing over their properties, has been uncovered. Photo by BGNES
A pawn shop in the central Bulgarian town of Stara Zagora had developed an almost perfect scheme for withdrawal of loans against property, with over 80 victims so far identified.
The pawn shop had carried out all the transactions correctly. However, they had misled customers by presenting it as an normal transaction, whereas the real purpose was, simply, to take over the properties.
According to the Bulgarian Penal Code, this amounted to deception.
The scheme worked by the Pawnshop taking loans against promissory notes or another type of written commitment.
After the debtor had begun making repayments, no documents were issued.
On a specific date, the person who took the loan was supposed to return the borrowed amount excluding the entire interest of the so-called creditor.
If that did not happen, the interest rates jumped to 200%.
In one case, dating from 2008, a man accepted an offer to buy four decares of agricultural land near the village of Mogila against a mortgage on a shop he had inherited in the town of Stara Zagora.
He stated that he had no cash, and was immediately offered BGN 60 000 by the pawn shop against the mortgage. The contract stipulated his obligation to return the loan as a guarantee and to mortgage the property.
Unable to sell the land he had bought, the man was forced to forfeit the shop. He also discovered that the interest charged on the BGN 60 000, over a period of only two months, meant he was expected to hand over a total of BGN 230 000.
In order to repay the pawnshop, the man's wife signed a further document that transferred ownership of an apartment to the pawn shop.
However, the outstanding amount continued to grow and the creditors took yet another apartment of the family.
The final result of the initial "transaction" had cost the family a shop and two apartments in the city center.
Now it has been discovered that this was not an isolated case, but that many more people and families had fallen prey to the scheme.
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