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Hundreds of OFWs left without passports as police bust loan sharking operation

06 July 2018

Hundreds of OFWs who borrowed money from the
loan shark now face a tough time re-applying for passports
By Daisy CL Mandap

Just three years into her employment as a domestic worker in Hong Kong, Joanne M. is more than $30,000 in debt. She says she has never really gotten out of paying for the first loan she took in the Philippines to help finance her application for overseas work.

But now she has a bigger problem. Her passport which she hocked recently in exchange for a $4,000 loan is now with the police, after the elderly man she had borrowed the money from was arrested in a sting operation on Wednesday,
Jul 4.

Joanne, 32 and single, is one of hundreds of Filipino domestic workers who are now facing this dilemma, following the arrest of the 64-year-old loan shark in Tsuen Wan. The man was reportedly arrested following a tip-off, and was found in possession of three passports.

A subsequent raid of his home yielded 856 more passports belonging to either Filipino or Indonesian domestic workers, all surrendered as surety for the loans they took from him. Not reported was that he had also obtained the borrowers' employment contracts as part of the bargain.

Each borrower was charged 125 percent interest per year, which was more than double the legal rate of no more than 60%. Based on the number of passports and the maximum loan amount of $4,000 per borrower, the money lending operation was said to be worth at least $3 million.

Joanne supports the allegation, saying she borrowed $4,000 early this year out of desperation, and was made to pay $440 per month in interest alone. She had yet to pay the principal amount when the illicit operation was uncovered.

Asked why she opted to get a loan from an unlicensed money lender, Joanne readily admitted that it was because she still had an outstanding loan of $30,000 from a financing company.

She said she first took out a loan in Hong Kong to pay relatives back in the Philippines who had lent her the Php80,000 she used to fund her work application to Hong Kong.

Much of what she had borrowed the first time was not repaid, so she applied for a “reloan” which bloated her monthly amortization to such an extent that she did not have any money left for emergencies.

Thus, when she needed money badly early this year, she looked for another source, and ended up surendering her passport to the loan shark in Tsuen Wan so she could get the loan.

“Alam ko naman na mali,” she said, after being asked if she knew it was illegal for the passport to be given as security for a loan. “Pero wala na akong ibang matatakbuhan”.

At first, she thought she could just get back her passport from the police, but was told this was not likely to happen because the authorities would need to keep the documents as evidence, especially if the case goes to court.

Thus, the only option left to her is to apply for a new travel document from the Philippine Consulate, a process that has been intentionally made difficult in recent years because of the recurrent practice of migrant workers of using their passports to secure loans from unlicensed moneylenders.

Her only consolation is, her employer supports her effort to obtain a new passport, as she will need it  to process a new work contract and to travel out of Hong Kong when necessary. But as to when she could get a replacement document is still up in the air, especially with the current high demand for the new 10-year passports being issued by the Philippine government.

Joanne is also worried about her employment contract that the money lender had taken and which now appears also lost, as she had not told her employer that she also surrendered it to secure the loan.

Meanwhile, the lone suspect in the loan sharking operation is not expected to be charged in court anytime soon, as police will need to gather evidence by going over the seized documents, and look for the debtors like Joanne.

The investigation could prove tedious, as shown by a similar loan sharking operation busted by the police in March last year.

In that particular case, a local couple aided by eight Filipino “runners” including their domestic helper, reportedly gave loans totaling $10 million to more than 1,2000 Filipino domestic workers over an eight-month period, and made a profit of $2 million in the process.

All 10 suspects were arrested for “conspiracy to lend money at excessive interest rate” and “conspiracy to blackmail”, but have yet to be charged in court.

Hong Kong does have stringent laws on illegal money, lending, however. Violators face a maximum penalty of 10 years in jail and a fine of $5 million.


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