Surge in foreign domestic helpers falling victim to loan sharks, employers threatened with disturbing tactics

3rd from left: Chrystie Lam Haa-iu, 4th from left: Edward Leung Hei.

9th June 2024 – (Hong Kong) Recent reports have unveiled a distressing surge in cases where employers of foreign domestic helpers (FDHs) are seeking help after falling victim to loan sharks. These loan sharks resort to tactics such as splashing red oil, threats, harassment, and even manipulating photos of FDHs and employers to extort money from the employers, demanding repayment of alleged debts. Some affected employers claim that their FDHs owe them over HK$100,000, and they continue to receive relentless messages demanding repayment. Despite reporting the incidents to the authorities, the relevant collection agencies persist in employing various methods to pursue the employers for payment.

In light of this alarming trend, Edward Leung Hei, a Legislative Councillor, revealed that approximately 20 victimised employers have reported instances where their hired FDHs were lured by online loan advertisements. These advertisements enticed FDHs to fill out “loan consultation forms” under various pretexts. Once the forms were submitted, the loan sharks claimed instant approval and promptly transferred funds into the FDHs’ bank accounts. Unbeknownst to the FDHs, they were borrowing money at exorbitant interest rates. Even after repaying the loans, they remained trapped in a cycle of debt. Moreover, these employers faced intimidation and harassment from loan sharks through various means.

Chrystie Lam Haa-iu, the founder of the Coalition of Global Home Service Sustainable Development and Quadripartite Alliance for Harmonious Employment Practices (QAHEP), stated that her organisation has received over 20 referrals for assistance from both employers and employment agencies. The number of cases continues to rise, reaching a peak in June with daily appeals for help. Interestingly, more than ten cases were linked to a particular online lending company with a name starting with “X.” Lam acknowledged that some FDHs were indeed deceived by the “fake consultation, real loan” tactic employed by these online loan advertisements. However, she emphasised that employers have no way of discerning whether their FDHs have borrowed money. It is possible that some FDHs have borrowed from one or even multiple financial companies, with one case involving borrowing from ten different companies amounting to HK$100,000. Additionally, interest rates as high as 140% for a 14-day loan have rendered FDWs unable to repay their debts.

Both employers and intermediary agencies have reported that, despite filing police reports and notifying the Immigration Department, the “X” financial company dismissed their actions, claiming they were futile. Disturbingly, this company appears to possess extensive knowledge of employers’ details, including taking photographs of their home addresses. Lam revealed that the “X” financial company has multiple branches in Hong Kong, Taiwan, Singapore, Malaysia, Thailand, Vietnam, among other locations. The company also entices FDHs with prizes such as smartphones, jewellery, and cash vouchers to engage in the “consultation” process.

Hsu Ming-ju, the Deputy Chairperson of the Quadripartite Alliance for Harmonious Employment Practices (QAHEP), disclosed that in addition to splashing red oil on employers’ residences or posting “debt collection banners,” some FDHs have been coerced into providing their employers’ family photos to loan companies. Subsequently, collection agencies manipulate these photos, incorporating them into explicit images, and use them as a means of blackmail, forcing employers to shoulder the burden of their FDHs’ fraudulent behaviour. One employer, Mr. Chan, recounted his experience, stating that his Filipino FDH claimed she needed to borrow money due to family reasons, specifically mentioning the need to care for several children. Despite employing her for seven years, Mr. Chan began experiencing harassment in January, ranging from phone calls from Hong Kong and foreign numbers to individuals knocking on his door. The situation escalated in March when red oil was splashed on his property. Although he immediately reported the incidents, no updates were provided after providing his statement. Mr. Chan discovered that his FDH had borrowed from four financial companies, totalling over HK$100,000. Despite repaying a sum of HK$6,000 on her behalf, it proved futile as the FDW expressed no intention of repaying the debt. Mr. Chan stated that he would not consider renewing her contract and expressed concerns about the safety of his children in light of these events.

Another employer, Ms. Ngai, employed her FDW from mid-October of the previous year. In December, she received her first debt collection letter, followed by a series of subsequent demands, with the highest amounting to over HK$16,000. Despite terminating the FDH’s contract, the harassment persisted. Even after presenting the termination agreement to the collection agency, they continued to pursue her for payment. Ms. Ngai expressed deep concern about being targeted with red oil and the significant impact the events have had on her work and personal life.

In response to these distressing accounts, legislators and advocacy groups are calling for stronger measures to protect foreign domestic workers and their employers from loan shark exploitation. They are urging the government to investigate the loan companies involved, enhance regulations on online lending platforms, and increase penalties for illegal debt collection practices.

Legislative Councillor Edward Leung Hei has called for a comprehensive review of the laws and regulations governing online lending to prevent further exploitation of FDHs. He emphasized the need for stricter oversight and monitoring of online loan advertisements that target vulnerable groups like FDHs.

The Coalition of Global Home Service Sustainable Development and Quadripartite Alliance for Harmonious Employment Practices (QAHEP) is working to support affected employers and raise awareness about the issue. They are providing assistance to employers who have fallen victim to loan sharks and are advocating for better protection of FDHs’ rights.

The QAHEP has also urged employers to be cautious and vigilant, advising them to verify the financial situation of their FDHs regularly. They recommend maintaining open communication with FDHs and creating a supportive environment to address any financial difficulties they may face.

The government has acknowledged the seriousness of the situation and expressed its commitment to addressing the issue. They have pledged to work closely with relevant authorities to investigate the loan companies involved and strengthen regulations to prevent such exploitation in the future.

The Hong Kong Police Force is actively investigating the reported cases and has urged affected employers to come forward and provide any relevant information. They have assured the public that they take these incidents seriously and will take appropriate action against those involved in illegal debt collection activities.