Domestic Helpers Targeted by Predatory 'Cash Voucher' Loan Scheme

Domestic helpers in Hong Kong are being exploited by a predatory 'cash voucher' loan scheme, according to reports from non-governmental organizations (NGOs) and a lawmaker. The scheme, which appears to target vulnerable foreign workers, involves high-interest loans and aggressive harassment tactics, leaving victims trapped in a cycle of debt and fear.

Uncovering a Troubling Trend of Exploitation

Persistent Reports of Harassment and Threats

Two NGOs and a lawmaker have been logging reports from domestic helpers who have been harassed or threatened by illegal money lenders through text messages and social media. Victims have reported that even after reporting the cases to the police, the harassment has continued unabated. According to Chrystie Lam Hau-yiu, the president of the Coalition of Global Home Service Sustainable Development, the police have often dismissed these cases as mere financial disputes between the helpers and their employers, refusing to take formal statements.

The 'Cash Voucher' Loan Scheme

The investigation has uncovered a specific loan scheme targeting domestic helpers. One victim, identified as Jackson, reported that her helper was offered a "cash voucher" loan of HK,500 after purchasing a cellphone worth around HK,000 from a mobile phone chain with multiple branches in the city. The helper, who was living "from hand to mouth" and supporting her family back home, agreed to the loan without fully understanding the terms, which included a 12-month instalment plan that was later changed to a 6-month repayment period.

Exorbitant Interest Rates and Predatory Tactics

A Post reporter who visited one of the chain's stores in Central was informed that the "cash voucher" loan came with a 6-month instalment plan, requiring the customer to pay back HK,000 on a HK,000 loan. This translates to a simple interest rate of 100% per year, far exceeding the legal limit of 48% under the Money Lenders Ordinance.Furthermore, the reporter was told that these "cash vouchers" were only available to Filipino domestic helpers or those who could prove their country of origin was the Philippines. This suggests a targeted approach to exploit a vulnerable population.

Lack of Regulatory Oversight

The store in question is not registered on the List of Existing Money Lenders Licensees maintained by the Companies Registry, indicating a potential lack of proper licensing and oversight. When confronted, a store manager denied that the company was a money lender, claiming the "cash vouchers" were merely a "product" available for purchase.

Overwhelming Complaints and Victims' Fears

The Coalition of Global Home Service Sustainable Development has reported receiving an average of 5 to 8 new inquiries per day since holding a press conference in June to expose the activities of a separate online money lender. Many victims are reluctant to report the harassment to the police, fearing that their employers may find out about the loans and terminate their employment.

Lawmaker Intervention and Police Investigation

Lawmaker Edward Leung Hei has been dealing with complaints about online money lenders since April and has brought the issue to the attention of the Financial Services and the Treasury Bureau, which oversees money lending activities. At least a dozen cases are currently being investigated by the police.The exploitation of domestic helpers through predatory loan schemes is a troubling trend that highlights the vulnerabilities faced by this population. As authorities work to address the issue, it is crucial that stronger regulatory measures and enforcement are put in place to protect these workers from financial exploitation and harassment.