Hong Kong police probe ‘cash vouchers’ lending scheme targeting domestic helpers

An NGO and a lawmaker said they had logged reports almost every month since as early as March from helpers who had been harassed or threatened by illegal money lenders by text message and through social media.

Victims told the NGO that reporting their cases to police did not stop the harassment.

“Police turned the employers away by saying the issue was a financial dispute between helpers, and did not even bother to take statements from them,” Chrystie Lam Hau-yiu, the president of the Coalition of Global Home Service Sustainable Development, who has handled inquiries from employers, said.

Jackson said her helper was last September offered a loan of HK$7,500 as a “cash voucher” from a mobile phone chain with more than 10 branches in the city after she bought a cellphone for about HK$2,000.

She added the helper explained that she lived “from hand to mouth” to take care of her family at home and had no idea how interest rates worked when she agreed to the loan.

The “voucher” was said to come with a 12-month instalment plan, but Jackson’s helper received demands to pay back the money in six months.

Her failure to do so triggered the harassing calls which Jackson received in April.

A Post reporter visited one of the chain’s stores in Central and was told by a salesperson that the “cash voucher” could be bought by customers to get instant cash.

The employee said a customer who bought a HK$4,000 voucher had to pay back HK$6,000 in a six-month instalment plan.

The rate of simple interest is 100 per cent a year.

The reporter was also told that the voucher would only be sold to Filipino helpers, or to people who could prove their country of origin was the Philippines.

The shop is not registered on the List of Existing Money Lenders Licensees on the Companies Registry.

The shop owner did not respond to questions from the Post.

But a store manager on Thursday denied that the company was a money lender and insisted the “cash vouchers” were only a “product” that was available to buy.

The definition of money lender under the Money Lenders Ordinance means a person whose business – irrespective of whether the individual has other commercial interests – is that of making loans or who publicises themselves in any way as being involved in the lending of money.

Anyone who lends money at an effective rate of interest of more than 48 per cent a year is in breach of the law.

Dominic Wai, a partner at a law firm ONC Lawyers and with experience of legal work in the business sector, said the key to determining whether the phone retailer was a lender depended on whether it had earned money from the transactions on a regular basis.

He highlighted that “any advance, discount, money paid for, or on account of the request, of any person” would fall under the definition of a loan.

He said, if that was the case, whoever was involved in giving out loans as a business would need a licence.

Lam said the coalition had fielded five to eight new inquiries a day on average since they held a press conference in June to expose the activities of a separate online money lender.

She added that most victims the coalition had dealt with had reported the online money lender, which advertised “emergency funds for foreign workers” on social media.

“We are overloaded with complaints,” Lam said.

Victims had received threatening messages from numbers with the country code for Malaysia and were asked to transfer money to account names not linked to the individuals demanding repayment.

Rachel Li, head of case management and research at HELP for Domestic Workers, said some victims feared going to police because they were frightened they would be fired if their employers found out about the loans.

“A lot of workers just want the harassment to stop, so they would rather pay and stop the harassment than take actions and file complaints,” she said.

Li said they dealt with an average of five to eight new cases every month.

Edward Leung Hei, a lawmaker who has been dealing with complaints about online money lenders since April, said at least a dozen cases were being investigated by police.

He added he had also brought the problem to the attention of Financial Services and the Treasury Bureau, which polices money lending activity.

*Name changed at request of interviewee