The Consulate General of the Philippines and the Consulate General of Indonesia met Hong Kong Chief Secretary for Administration Matthew Cheung Kin-chung on 3 October 2018 to seek strong action from the Hong Kong government against illegal money lending operations targeting Filipino and Indonesian household service workers (HSWs).

This joint call aimed to raise concerns on recent cases that occurred on November 2016, July 2018, and August 2018 wherein illegal money lenders asked the HSWs to surrender their passports in exchange for the loans. Without sufficient knowledge of Hong Kong law combined with economic pressures, many helpers see this method as simpler than going to loan agencies.

The Consulates, led by Philippine Consul General Antonio A. Morales and Indonesian Consul Erwin Muhammad Akbar, requested the Hong Kong authorities the following:

• The expeditious conclusion of the investigation by the Hong Kong Police and completion of the legal process of the abovementioned cases, with the end in view of filing the appropriate cases against suspected illegal money-lenders activities.
• The strict implementation of and enhancement of efforts to enforce money-lending laws, rules and regulations, and the increase in the criminal liability of individuals illegally operating as money lenders or imposing exorbitant interest beyond what is allowed under Hong Kong laws, rules and regulations.
• The possible criminalization of the act of demanding and withholding passports and labor contracts as loan collateral, not only those committed by employers and employment agencies but, more importantly, by illegal or unlicensed money lenders.
• The possibility of lowering the interest rate for loans, the current across the board rate is legally set at 60 percent, contracted by specifically by foreign domestic workers.

Agreeing with the two Consulates that keeping the passports is a crime even under Hong Kong law, Chief Secretary Cheung expressed the government’s commitment to prosecute illegal loan sharks targeting foreign domestic helpers (FDHs).

He added, however, that educating the workers to avoid taking out loans from illegal money lenders and collaborating with local, Filipino or Indonesian financial institutions that impose less prohibitive interest rates and facilitate processing might be able to address the problem more effectively in the long term.

In response, both Consulates said they continuously warn their nationals that their passport is a travel document that must be securely kept and not to be misused for any reason. They added that both Consulates exert considerable efforts to broaden the scope and participation in their regular financial literacy training seminars to educate their nationals in managing their finances.

The Consulates requested the HK Government representatives, among whom were senior officials from the Treasury Bureau, Labour and Security Departments, and the Hong Kong Police Force (HKPF), that more attention be given to the cases involving FDHs in Hong Kong. They also expressed appreciation for the opportunity to express their concern to CS Cheung.

In November 2016, the Philippine Consulate General received complaints against a Hong Kong national for requiring Philippine passports as collateral to loans, eventually leading to a police operation resulting in the arrest in March 2017 of the alleged illegal money-lender, her husband, and eight Filipino nationals as accomplices, and in the recovery of 242 Philippine passports.

In July this year, Hong Kong police arrested a Chinese retiree in a similar case victimizing Indonesian and Filipino workers out of a total of HK$3 million by forcing them to surrender their passports as collateral and charging them annual interest above the legal limit of 60 percent. Police recovered 887 passports, all but 9 of which belong to Indonesian nationals.

In addition, the Indonesian Consulate received 115 reports on the unlawful withholding of Indonesian domestic helpers passports in the year of 2017.

In August 2018, the HKPF arrested a loan shark and seized 422 Philippine passports involving 404 passport holders, some of whom had previously pawned their old/expired passports.

All cases remain under investigation and all the passports are still under HKPF custody. The Philippine and Indonesian Consulates General are coordinating with investigators to expedite the conclusion of the cases.