Hong Kong police smash loan shark syndicate, arresting 24 including 12-year-old
Hong Kong police have broken up a loan shark syndicate that charged 5,000 borrowers annual interest rates of up to 100 per cent or more, with the operation leading to the arrest of 24 people as young as 12-year-old.
The force said the syndicate targeted potential customers randomly through cold calls and text messages, enticing them with discounted loan rates and no vetting requirements for lending. The loan sharks even claimed they were representatives of licensed money lenders.
'Most residents swayed into borrowing money are attracted by the so-called discounted loan rates. But in reality, the syndicate would collect one third of the loaned amount as an administrative fee,' Senior Inspector Poon Sung-lai said.
'On the surface, although the annual percentage rate is lower than the legal limit of 48 per cent, but the actual annual percentage rate being charged can be as much as 100 per cent or even higher.'
Poon noted that the syndicate would also charge debtors a penalty amounting to 10 per cent of the amount they loaned if they could not pay their instalments in time, with many victims failing to return the money owed due to soaring debts.
The syndicate would then pursue debtors with phone calls and text messages, resorting to threats such as pouring red paint on their doorsteps. Police said that some members of the syndicate's debt collection team were as young as 12 years old.
According to the force, the gang had operated for about 10 months using a unit in a Tsuen Wan industrial building as its base of operations, where they coordinated their borrowing, debt collection and money laundering.
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