The victims borrowed as much as HK$55 million ($7.1 million) in total, the city’s police said in a statement today. Two companies, which had acted as intermediaries to money lenders, charged commissions as high as 50 percent of principal, the police said.
Low-income Hong Kong residents made up most of the victims, who had borrowed amounts ranging from HK$6,000 to HK$180,000, said Gar Kam-lam, a senior inspector at the Hong Kong Police. More than 10 domestic workers were charged interest rates as high as 260 percent by other maids, he said.
Hong Kong Police investigated 38 reports involving lenders charging more than 60 percent interest, which violates the Money Lenders Ordinance, in 2011, up from 23 reports two years earlier, it said in an October statement. The penalty includes imprisonment for as long as 10 years and fines of as much as HK$5 million.
Some of the victims who couldn’t pay back the money offered their personal banking accounts for laundering cash, the police said. The arrests were made after an investigation started about three months ago, according to the police.
Financial intermediary companies and licensed money lenders aren’t regulated by the Hong Kong Monetary Authority, which doesn’t track lending outside the city’s 23 loan-issuing banks and 25 deposit-taking companies.
Thousands of women employed in Hong Kong, most from Indonesia and the Philippines, are working off debt by turning over almost all of their pay for months to loan companies and agencies that place them with families, according to interviews with workers, nonprofit groups and academic researchers.
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