The Yakuza: Bad Debts, Bad Men

Call it the yakuza discount. When the Resolution & Collection Corp. buys a bad loan from one of Japan's banks, it now pays 70% to 100% of the assessed value of the collateral behind the loan. But there are exceptions: If the loan is linked in any way to Japan's criminal underworld, a bank might get only 60%.

One of the trickiest challenges for the RCC and other credit collectors these days is to chase away the gangsters, known as yakuza, who frequently squat in foreclosed office buildings, apartment complexes, and homes. And in the many cases where yakuza are themselves the debtors, it is difficult to get them to pay. As former gang investigator Raisuke Miyawaki puts it: "The yakuza are deeply involved in the Japanese economy, particularly the bad-loan mess."