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Use of passports for loans down to trickles since OFC raid

09 March 2020

By Vir B. Lumicao

Consul Saret inspects the 1,400 passports seized from Cheers-OFC lending company (file photo)

Many Filipinos who are in the habit of using their passports as collateral for loans appear to have learned their lesson since the police raid on the lending company, OFC, on Jun 5  last year.

According to Consul Paulo Saret, head of the Consulate’s assistance to nationals section, there has been a noticeable drop in such cases since the police seized 1,400 Philippine passports from the Sheung Wan-based financing company.

“Medyo after nung 1,400 natin, paisa-isa na lang, mga ‘privateers’ na lang,” said Consul Saret in an interview on Monday, Mar 3.


He was referring to small, unlicensed operators who lend cash at no less than 10% interest per month to mostly domestic workers, and collect their passports as guarantee of repayment.

“Kung Pilipino rin yung accomplice (lender), sinasabihan namin ng ‘If you will not stop it, we’ll be constrained to report to the Hong Kong authorities and apektado ang lahat ng kabuhayan nyo’,” Saret said.

Consul Saret says only small unlicensed money lenders still collect passports as security for loan
The raid on OFC had put hundreds of Filipino borrowers at risk of losing their jobs, after the Consulate stood firm in its decision not to allow them to get a replacement passport easily.

But because of the big number of Filipino workers involved, the Consulate obtained permission from the Department of Foreign Affairs to waive its previous requirement of making the borrower apply for a new document in Manila.

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Instead, the borrowers were made to sign an undertaking that they would not hock their passports again, or they would not be issued another one in future.

But those who needed their passports immediately, as in the case of those who had to renew their working visas, were forced to secure travel documents for the meantime, adding up to the cost. They also had to go to the police to explain how they lost their passports before being cleared to apply for visa renewal.
At least two of the borrowers who were fired by their employers for pawning their passports were also issued one-way travel documents so they could return home.

“Parang malaking bagay po yung OFC case na decided by the court, after that wala nang legal lending entity na naireklamo sa atin,” the consul said.

“Yung mga privateers naman, in the first place, hindi naman sila talaga allowed to engage in that business, so puwede silang ireklamo anytime kasi wala silang license eh,” he added.
Cheers Holding Company, which operated OFC, was fined $10,000 after admitting a violation of a hardly-known Hong Kong law that prohibits money lending companies from collecting passports and employment contracts as securities for a loan.

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Cheers admitted a count of “accepting security for a loan in a prohibited form” in Eastern Court on Nov. 22. The maximum penalty for the offence is a fine of $100,000 and imprisonment of up to two years.

Its sole owner and director, Wong King Yiu Wilson, was bound over for two years as part of a plea bargain, according to prosecutors.
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