OWTEL shops raided over alleged illegal lending

 

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.

Basahin ang detalye!

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 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.”

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 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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