Money Lenders



ORIGINAL POST
Posted by inkonkoni 18 yrs ago
As a concerned employer I'd like to make other employers aware of the issues of money lending in Hong Kong. A recent experience with my DH gives me reason to believe there is a lot of confusion over this issue and a lot of DHs are being exploited because 1, they don't know any better and 2, they believe they are at fault.

I'm not going to get into the issues of why they borrow money or whether or not they should, or what they spend it on.

But I do want to make two things very clear.

1. Anything over 60% interest PA is illegal.

2. It is against the law for anyone to hold another person's passport.


It is illegal in Hong Kong for any money lenders to charge more than 60% interest per anum, in any form. Sometimes the money lenders call the interest a "membership fee". Some term it a "penalty" some charge interest and penalities. If it works out to more than 60% pa, it's illegal. No matter what contracts might have been signed. It's illegal.

No one can hold the passport of another person. Firstly that passport is the property of the issuing country. Again it doesn't matter if it was handed over willingly or not. It is illegal.


Police are not really willing to do anything about this issue because it's a whole lot of work for them with little return, and often DHs will not testify in court for fear of dismissal. But basically it is a crime with vulnerable members of society being targeted.

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COMMENTS
mrsl 18 yrs ago
60% is legal? That is incredible!!!!


One question; I have heard that lenders will accept anything as proof of address. Does that mean that most employers lock all of their paperwork (bills, letters etc) away in an office or room in their house to which their helper is not allowed access?

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inkonkoni 18 yrs ago
some of these guys charge over 100 per cent interest. I don't think there is anything you can do to stop them from borrowing money.

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Dora the Explorer 18 yrs ago
I knew that the lenders charged stupid multipes of base rates, I just had no idea that they could charge upto 60% legally. Law or no law, that is criminal!

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geiboyi 18 yrs ago
This is why you must make it very clear when you employ a new helper that you will not tolerate her going to one of these money lenders - if she gives them your address (and she will have to) her contract will be terminated. Otherwise you will have threatening phone calls and letters, never mind the trouble the helper is putting herself into. Some of these ladies are young and innocent and have no idea what a 60% interest rate means to them. Tell them if they have money problems they must see you about it (if you are prepared to help them - it may only be that they need an advance, which they can they pay you back every month) - this may make a huge difference. But really be clear about the money lender thing...

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inkonkoni 18 yrs ago
Dora, I was shocked at that too. It's pure exploitation of the poorer sectors of society. I would be great if there was some sort of formal bank that they could go to that charged them less.

Geiboyi that's sound advice, but I inherited this money problem with the helper.

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geiboyi 18 yrs ago
Hmmm, that's a problem...

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inkonkoni 18 yrs ago
I stepped in and sorted them out. It took a day to deal with one, as they were "legit" although threats had been made to "send someone to visit her". A sharp word with the manager put that right. She went in to see them and it seems to be worked out. Still don't know the details but it involved sureity, someone absconding with the money and refinancing loans. What a mess!

The second case was more difficult as the guy was holding her passport. She had borrowed $2,000, of which he immediately took $250. She paid him the $250 "interest" for two months, and then couldn't cope. One year down the line he was wanting $5,100 from her to give her her passport back. Very basically the police were Not Interested. Even with iron clad proof they were still Not Interested, with one officer wagging his finger in her face while scolding her for handing over her passport. Luckily I had gone with her, he was very intimidating. When I tried to explain what was happening he scolded me, shouted me down and refused to listen. So we just had to sit tight until higher ranks got there. Finally the CID arrived and the guy was arrested and action taken. They found scores of passports in his office but most of the "victims" will not come forward because they fear they will lose their jobs or end up in prison. So the abuse will continue.

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inkonkoni 18 yrs ago
Yes, she was involved in that too. There needs to be greater regulation or protection or something.

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Burgundy 18 yrs ago
No capitalist society has ever legislated successfully against money lending. As with prostitution, the "best" you can do is drive it underground - and thereby make it even more dangerous for the vulnerable.

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dimac4 18 yrs ago
The DH just have to learn to live within their means- like the majority of us have to. It is usually a cultural problem - when they lend money to each other it is usually as a 'gift' that usually doesn't need to be paid back until the other person nneds it - in our church their have massive problems with the girls borrowing from each other.


I made it a condition of employment - no borrowing money, not going guarrantor for anyone and NO - absolutely NO lending of her personal savings to anyone else. Having these conditions allowed he to easily say no to those who asked for these things.


She went home after saving over $10,000 USD in 3 years - bught a pig farm and an oven, paid off her house, had another baby and is working on her own business. It can be done if they are willing.

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inkonkoni 18 yrs ago
Personally I have no trouble with prostitution and think is should be entirely legal so that sex workers can be educated about diseases, and it will take the industry out of the hands of organised crime.

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inkonkoni 18 yrs ago
It's intersting to note how other DHs are trashing mine because of her actions. The general feeling is that SHE is the one to do something wrong. They cannot see that it is for their own benefit. also interesting to note how the HK news royally messed up the facts in their front page lead July 1.

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TayTay 18 yrs ago
Even if you fire your DH, can it really stop these ruthless agencies coming to our door and creating havoc? By law, the DH is responsible for the loan, but even if she has moved out, can the loansharks still do a sneaky. Loanshark came to my door this morning and passed me a letter advising me that my DH is owing money. Turned out she was the guarantor and the borrower didn't pay. Think she is going to get fired very soon, but have a terrible fear that I'll still get harrassed.


It's ridiculous that employers are not protected in this way. It's illegal to take away their passport - I'm not sure about the employment letter which has our personal details on it. But this is exactly how my DH helped to get the loan approved. Why do we have to face this?

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s1 18 yrs ago
tay tay, if your helper does a runner or u dismiss her, you must report the incident to immigration. you will then have a letter from immigration stating that your employee has left. the loan sharks will accept this letter and will not hassel you further.


they don't need their passports to get a loan, just the contract is sufficient. the finance companies will just check on how many mths they have remaining on the contract and lent an amount based on such info.


i have seen it all, my in law's helper was a shocker! she was dismissed for stealing jewellery about 40-50k worth. however she was not required to leave straight away (my in laws are so gullible), anyway during that extra few days remaining, the helper took her contract to the finance companies and secured loans for about 30k. we only found out after the helper left.

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inkonkoni 18 yrs ago
tay tay... anyone taking out a loan has to give their employer's address. You just need to be firm with the lending agencies and tell them you will no stand for them making a nuisance of themselves. You're just the kind of employer these agencies hope for when they trap these women into paying for friends loans, or paying wild interest rates. Have some compassion and stick up for your helper.

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inkonkoni 18 yrs ago
I think helpers should be given a certain time period in which to find other employment before being tossed out of the country.

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TC 18 yrs ago
inkonkoni,

They are - it's two weeks. And if they have a concrete lead they can apply for an extension. And believe it or not a lot of helpers do manage to secure a new employer in that short time. A lot of them don't, but they are often the ones who aren't proactive enough to do things for themselves.

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inkonkoni 18 yrs ago
er yes, TC, I know. I was just replying to the suggestion that they be forced to leave immediately.

jbebeb, the banks need to step in and do it properly, simple as that.

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TC 18 yrs ago
inkonkoni,

Then I suggest you adopt a policy of saying what you mean and meaning what you say. You clearly said "..." (oh, I can't be bothered - you can read it for yourself if you like).

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annebin 18 yrs ago
Most FDH arrive in HK already with debts and loans to pay and they haven't even started work yet. A lot of employment agencies charge excessive fees, forcing a new FDH to fork over 90% of her monthly salary for an average of 4 months before she can fully pay for the "loan".


In the meantime, there are financial obligations back home and some have no choice but to make another loan to send to their family. If her employment goes smoothly, she has good chances of earning enough to send to her family and pay off all her debts.


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inkonkoni 18 yrs ago
jebebeb there needs to be a bank policy for micro-lenders with no loans over two or three times the monthly pay and a resonable interest rate.

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