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By Root 1100 0

during the 1990s was this one, with assets leaping 25 percent in some years. Of Japan's 12 million «deep debtors,» 1.5 to 2 million are «heavy debtors» with no chance of repaying loans. Bankruptcy is not an alternative for most of them because it carries heavy social disapproval. Also, says Utsunomiya Kenji, Japan's leading bankruptcy attorney, «They haven't declared bankruptcy only because they don't know how.» For most of them, however, the real reason for not declaring bankruptcy is the fear of gangsters. Just as the Yakuza (organized crime) plays a role in Japan's financial system at the high end, by fixing shareholder meetings so that nobody asks questions, it plays an even larger role at the lower end, as loan harvesters. No legal bankruptcy proceeding will prevent a group of burly crew-cut men from threatening your in-laws, pounding on your door at night, and calling you at your place of work twenty-five times a day. As a result, tens of thousands of people disappear each year in a process known as yonige, «Midnight Run.» They discard their homes, change their identities, and move to another city, all to hide from the enforcers of Japan's consumer loans.

Traditionally, people must clear all debts by the end of the year, so New Year's Eve is the premier time for yonige. The 80,000 people who fled in the night in 1996 had nearly doubled by 1999, to 130,000, while estimated sarakin debts quadrupled, from about $45 billion to $200 billion. So popular is the Midnight Run that it has spawned a new business, benriyasan («Mr. Convenient»), facilitators who help families flee their homes and who take care of their possessions while they are on the run. In 1999, Japanese television featured a new drama, The Midnight Run Shop, whose hero devises schemes for people to evade gangster loan enforcers. It's a Mission: Impossible for debtors, with each episode featuring a new clever escape: a disc jockey goes on the lam during a live show; a florist evaporates during a wedding.

Sarakin loans are not the only means by which Japan's financial system beggars the public. The nation has no lender-liability laws, leaving the public at the mercy of scam artists who prey on credulous old people and heavy debtors. Most notorious of the scams is so-called variable life insurance. In the late 1980s and early 1990s, banks and insurance companies colluded in selling these policies to homeowners, claiming that they would guard against high inheritance taxes. A homeowner would mortgage his house and invest the proceeds in an insurance policy but was not told the meaning of the word «variable»; namely, that payouts were not guaranteed. When investments made on their policies went south with the collapse of the Bubble, owners of variable insurance found that they owed more on their houses than their policies were worth.

Tazaki Aiko, age sixty-two, was a typical victim. The law prohibits banks from selling insurance, but they got around it as follows: In 1989, a salesman from Mitsubishi Bank began paying Tazaki visits, warning her about the high inheritance tax her family would face. Soon she received a call from someone at Meiji Life Insurance (one of the Mitsubishi keiretsu group of companies), offering her a variable insurance policy Tazaki bought, and seven years later she faced eviction from her home.

Altogether, insurers issued 1.2 million such policies, leading to the public's loss of trillions of yen. In many cases, bankers and insurance-company salesmen were present together at the time the contract was signed. Victims have filed hundreds of lawsuits, and some of the plaintiffs have committed suicide. «Suicide is a tempting idea, because the longer you live the larger your debts grow. That is the nature of the insurance,» says Oishi Satoru, the secretary for a plaintiffs' group. Yet to date, despite the damage done to the public, neither MOF nor the courts have punished a single bank or insurance official.

A system that favors gangster-ridden loan sharks as the established means of consumer credit, allows banks and insurance companies