It does seem to be effective, however. Reading up on organized crimes and cartels shows that this method of "business" is one that's been used for a century and still going strong.
I don't think this crime had anything to do with either, by the way, but punishing one person (or small group) to send out a message to others IS something that happens.
As someone previously pointed out, there is also the idea that the "debt" wasn't monetary but a reneging on a promise or a failure to follow through with something. Also valid ideas, though I don't feel strongly about them one way or the other.
I try to stay away from saying, "I wouldn't do this" or "I wouldn't do that" because though I can speculate for myself, I can't speak for how other people would react.