Police announced on Thursday the dismantling of a loan shark syndicate that charged excessive interest rates of up to 180 percent, leading to the arrest of 22 individuals, including a 16-year-old involved in illegal debt collection.
Officers from the Tseung Kwan O District launched an operation from June 16 to 25 after noticing a local loan shark group using messaging apps to recruit youngsters seeking quick money as "debt collectors" with payments of HK$500 to HK$1,000 per job.
The suspects, consisting of 19 men and three women -- aged 16 to 62 -- were arrested for allegedly lending at excessive interest rates, money laundering, possession of tools for unlawful purposes, criminal damage, and criminal intimidation.
Among them, four are under the age of 18 and reported to be students. The other arrestees claimed to be clerical workers, transport workers and unemployed, with some having triad backgrounds.
All of them were released on police bail and required to report to the police in mid-July.
Illegal operations model
The group has reportedly been operating since 2019, establishing an office in Mong Kok to facilitate illegal lending and debt collection.
Despite claiming interest rates below the legal limit of 48 percent, the actual annual rates were inflated to 180 percent after subtracting a 20 percent administration fee from the loan amount.
Police found that the syndicates will use communication software with an operation model similar to that of a food delivery platform.
When borrowers fail to repay their debts, the group utilizes the delivery platform model to assign debt collection tasks with clear instructions via encrypted messaging apps, such as phone intimidation, splashing red paint on debtors' homes and harassment of the borrowers' friends and family.
The loan shark syndicate would send out "orders" through the platform, listing the amount of remuneration, and interested parties could accept the orders through the software and later send photos as proof of the job done.
Investigations revealed the syndicate's involvement in four cases of criminal damage linked to unlawful debt collection activities, as well as a debt collection incident in Tseung Kwan O, where borrowers had taken out loans ranging from HK$25,000 to HK$100,000.
Notably, it was found that three students under 16 years old participated in 16 criminal damage cases, with some wearing their school uniforms during activities involving the splashing of red paint.
In an operation last Thursday (Jun 19), police intercepted a 17-year-old local student carrying red paint, industrial gloves and a debt collection receipt. He was arrested on suspicion of possessing items with intent to destroy or damage property.
Subsequent raids on the loan shark office the following day resulted in the seizure of HK$60,000 in cash, multiple electronic devices, phone SIM cards, checkbooks, and documents, uncovering loans spanning from thousands to millions of dollars.
Law enforcement officials apprehended three male and two female suspects, who are believed to be the masterminds and key members of the criminal organization. Additionally, the authorities have frozen the company’s bank account, which contains approximately HK$870,000.
(Phoebe Poon and Khan Heeba Lazmi)
