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Police have arrested 25 people, including a 13-year-old, in a triad-linked loan shark syndicate that lent over HK$200 million and hired students for debt collection through red-paint vandalism.
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The arrests followed a two-day operation that raided three syndicate centers between Tuesday and Wednesday after a four-month investigation.
The suspects, comprising 20 men and five women, aged between 13 and 69, were accused of lending at excessive interest rates, criminal damage, criminal intimidation, and money laundering. Among them, four are reported to be students, with several ringleaders and core members having triad backgrounds. All arrestees currently remain in custody.
During the operation, officers seized HK$1.94 million in cash from the Mong Kok lending center and froze around HK$8.4 million in bank accounts linked to the syndicate and its core members.
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Operated as “licensed money lenders”
Investigations revealed the group operated under the guise of a licensed money lender, luring borrowers with advertisements promising "no income proof" and "instant approval."
However, the group would deduct a 20 percent administrative fee upfront, which made the loan appear to fall under the 48 percent legal cap while actually charging far higher annual interest.
In one case, a victim only received HK$12,000 for a HK$15,000 loan after a HK$3,000 administration fee was deducted. With five biweekly repayments of HK$3,180, the effective annual interest rate reached 282 percent.
When borrowers failed to repay the loan on time, the late penalties could go as high as 800 percent of the original loan amount, trapping victims in spiraling debt.
It is understood that individual loan amounts ranged from tens of thousands to over a hundred thousand dollars, with the exact total losses awaiting further investigation.
For those who fell behind on payments, the syndicate would reportedly escalate their measures to pressure borrowers. Starting from phone threats and intimidating text messages, some victims would see collectors splash red paint on their homes.
Concerningly, several debt collectors were students aged 13 and 14, recruited through "quick cash" advertisements on social media platforms like Telegram.
Lavish life of the masterminds
Investigators said the group employed sophisticated methods to evade detection, where the Mong Kok office was found locked at all times with CCTV monitoring, while core members remotely controlled operations from overseas.
A clear division of labor was also reported, with some members processing loan applications, others handled payouts, and a separate team calculated the upfront fees.
Meanwhile, the two other centers in Fo Tan and Mong Kok frequently changed addresses to avoid police investigations.
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The raids at the three centers resulted in the discovery of large amounts of personal information from borrowers, with officers estimating the syndicate had offered loans to approximately 2,000 people over the past 12 months, totaling over HK$200 million.
Initial investigation also suggested at least HK$8 million in criminal proceeds flowed directly into personal accounts of core members, who lived in luxury residences, drove sports cars, and owned significant cash and luxury goods.
Police affirmed that financial investigations will be conducted to trace additional illicit funds.
Superintendent Lo Ka-chun from the police's Organized Crime and Triad Bureau stressed the authorities would not tolerate any triad-linked loan sharking, regardless of how the syndicate tries to hide its operations.
As for minors involved in debt collection, he urged youngsters not to fall for online quick-money traps that could cost them their future.
Police also urged the public to borrow only from licensed financial institutions, warning that falling for loan shark traps could lead to endless debt.
