OWTEL's shop in WorldWide Plaza was roped in during Sunday's raid |
Police have arrested 46 people in connection with an alleged illegal
lending and money laundering syndicate that targeted foreign domestic helpers.
The police made the announcement at a press briefing yesterday, two days after the shops of mobile phone retailer OWTEL (or One World Telecom) at World-Wide Plaza in Central were raided Sunday afternoon, and its staff rounded up for questioning.
Reports said its other shops in seven different locations were also shut down.
A police statement released to The SUN today said the anti-illegal loan operations codenamed “DarkCurrent” was conducted from Nov. 24 to 25 and involved two phone shops with multiple branches and a licensed money lender.
No names were mentioned, but subsequent social media posts by affected Filipino domestic workers named the money lender as RichRen Finance Limited, which has an office in Mong Kok.
“During the operation, officers
arrested nine local men, one local woman, eight foreign men and 28 foreign
women aged between 20 and 76, including the mastermind and core members of the
syndicate suspected of loaning without a licence,” said the statement.
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Seized during the raids were more
than HK$1million in cash, loan documents, passports and employment contracts. Nearly
HK$2 million in different accounts were frozen.
The annual interest rate charged by the group was as high as 400 percent, said the statement. Hong Kong laws only allow annual interest rates of up to 48 percent for loans.
At the press briefing, Chief Inspector Ho Yan-kit of the Hong Kong Island regional crime unit said, “The loan group would use various excuses to induce foreign domestic workers to take out high-interest loans and use various methods, including charging unreasonable fees and forcing them to buy cheap products, then deduct most of the principal from the borrowers.”
Ho told reporters one of the phone shops was found to have issued loans to 1,500 helpers, amounting to HK$9 million in the past six months, while another had lent HK$30 million to about 5,000 helpers.
“[The syndicate] took advantage of the victims desperate for
a loan and imposed unreasonable terms, handling fees, advance repayment and
hidden costs, while forcing them to buy unnecessary electronics to get the
loans,” Ho said in Cantonese.
He said the debtors were also asked to provide their employer’s personal
details to make sure they paid up, adding that both the helper and the employer
were harassed if repayments were not made on time.
Shop staff (in orange jackets) were arrested and herded to the ground floor |
One of the arrested phone retailers allegedly offered a $3,500 loan
to a domestic worker, but gave her only $1,000 in cash after forcing her to buy
a cell phone for $1,300 and pay extra for processing.
The helper was then made to pay $2,942 in four monthly
installments, amounting to an annual interest rate of 102 percent, said Ho.
Another victim who asked to borrow $6,000 from another phone retailer was given only $1,950 in cash, with the rest of the loan amount being given to her in cash vouchers she was to use at the same shop.
She then had to pay
the whole amount in three months, amounting to an annual interest rate of 397
percent.
Another method used was to force victims into paying $1,500 for
overpriced and unwanted “gift boxes” containing a mobile phone, skincare
products and a small amount of cash. Another $1,800 was reportedly charged as
interest and administration fees.
At the same press conference, Chief Inspector Wong King-shing of the
Central District crime unit said police had also arrested members of four
illegal lending websites and the mastermind of a local lending syndicate.
He said that the police started looking into the case in July
after receiving reports of domestic workers falling victim to online lending scams
that required them to give up their passports and employment contracts in
exchange for loans.
But once they surrendered their documents the websites would only
give them half of the loan amount, with the rest being deducted as “administrative
fees.” In some of these cases, the annual interest rate charge was 3,000
percent.
Wong said that in just a year of operation, the syndicate had extended
HK$700,000 in loans to 140 victims.
The victims were directed to the websites by friends or social media posts, and told to download forms they needed to fill up to secure loans.
Many were tricked into believing that these were legitimate operations because
some websites used names similar to licensed finacial companies.
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