Huy, 24, came to Japan to work as a mechanic around three years ago via the Hanoi-based East Sea Trading Service and Labor Export Joint Stock Company, or ESTRALA JSC, which specializes in sending laborers aboard.

Recently, the company received reports from his Vietnamese colleagues in Japan, saying they were concerned about his financial situation as he kept borrowing money from them and rarely paid on time.

ESTRALA administrator Nguyen Thi Thuy Dung called Huy to discuss the issue, but he insisted that there was no problem.

However, his family also said that Huy used to regularly send money home, but he had not done so for 6 months.

His family said Huy told them he was waiting for a higher exchange rate between the dong and the yen.

“But if that was really the case, he would not have had any reason to borrow money from so many of his colleagues,” Dung said.

ESTRALA has also received feedback from his employer at a Japanese factory that Huy’s productivity had decreased recently, and he had been failing to fully concentrate at work.

After several subsequent discussions, Huy finally admitted to ESTRALA that he had borrowed nearly one million yen (US$6,600) from loan sharks to deposit into his online game account.

Working in Japan, he earns 200,000 yen per month.

However, he said most of his salary has gone to pay the criminal lenders, leaving him with only a small amount every month.

Huy said he was looking for ways to repay his debt. However, the usurious interest rates he’s being charged – at least 5% a day – are too high for him to finish paying off his loans.

After understanding the truth about Huy’s situation, the ESTRALA board of directors began working with the Japanese factory to solve the problem. ESTRALA requested that Huy’s employer create conditions for Huy to take more overtime shifts and earn more money to pay off his debts.

Huy’s is not the only such case.

Nguyen The Dai, Deputy General Director of ESTRALA, said there has been an increasing number of Vietnamese workers borrowing money to gamble online recently.

Most people involved in such games cannot get out after they easily lose exponentially more than they win, plunging them quickly into debt, he said.

“After pouring all of their salaries into online gambling, they start borrowing from people in their circles and end up becoming easy prey for loan shark rings.”

Dai said there have been cases in which laborers defaulted, and were threatened by those rings, so they quit and fled back to Vietnam to hide.

In other cases, the laborers’ families in Vietnam have been blackmailed by criminal gangs using photos of the laborers being threatened with knives, he said.

It is not clear if the gangs are run by Vietnamese, Japanese, or people of other nationalities.

A Vietnamese worker at a factory in Japan. Photo by Uy Van

Japan has been the top destination for Vietnamese guest workers in recent years. In the first nine months this year, 55,700 of the more than 111,500 Vietnamese laborers sent abroad were in Japan, according to official government data.

Phan Viet Anh, a writer and group administrator of a 21,000-member online community of Vietnamese workers in Japan, often referred to as “interns,” confirmed that the number of Vietnamese migrant laborers going broke abroad due to gambling addiction was indeed on the rise.

Anh said part of the reason is the pandemic, which forced many laborers to stay at home.

More online gambling sites emerged during the Covid-19 era than ever before. And Anh said that many laborers forced to stay home thought they could play to kill time and create a source of income.

“Many families whose children went to work in Japan had to sell their possessions and property to pay debts to loan sharks in Japan so that their children could return home safely,” he said.

He said that his online group’s most recent case was of a laborer who messaged the group asking for help because they had given loan sharks all their identification papers and official documents as collateral to borrow 1.2 million yen ($8,200). But now they had no way to pay the debt and their work contract was expiring soon, meaning they were going to return to Vietnam, which could then in turn threaten their family.

Anh said that male laborers are required to hand over all their ID papers, bank cards, the address of their workplace in Japan, as well as their families’ contact and formation in Vietnam, while the dark situation for female laborers is that they must submit a sex tape of themselves for loan sharks to use as collateral.

He said the normal interest rate is 5% per day.

He also said the debts have prompted many Vietnamese laborers to stay illegally in Japan to work without any contract to pay off the loans.

Representatives of Japanese companies interview Vietnamese laborers recommended by ESTRALA JSC in 2020. Photo by VnExpress/An Phuong

In April last year, the Department of Overseas Labor Management at the Ministry of Labor, Invalids and Social Affairs issued a statement requesting companies sending Vietnamese to Japan to better manage their workers.

The department said in the statement that Japan’s National Police Agency had recently raised concerns over the fact that an increasing amount of Vietnamese people in Japan (including workers and trainees) have fallen into debt and blackmail thanks to gambling debts accrued with loan sharks. The agency said the problem was affecting the image of Vietnam in Japan.

Dai from ESTRALA said the company had now tasked its staff with keeping an eye on laborers in Japan in hopes of stopping them before they fall for the online gambling trap.

He said that more Vietnamese laborers falling into debt and hiding in Japan to work illegally would affect the entire labor export market.

Vo Anh Tuan, director of the Ho Chi Minh City-based Haindeco Saigon, which trains and sends interns to Japan, said the company had added training on how to stay away from online gambling and loan sharks.

The company has now ruled that any “interns” found gambling online will be sent back home.