‘I’m so scared’: Domestic workers in Hong Kong recount the painful cost of falling prey to online loan ‘scams’
Hong Kong Free Press
Like many migrant domestic workers in Hong Kong, Mary has a lot of people counting on her and the money she sends home every month. She has two children in university, two in high school, and a baby back home in the Philippines. She supports her mother and her siblings, too.
When a recent family emergency in the Philippines demanded quick cash, Mary had limited options to get the money needed and responded to an advertisement on Facebook Messenger offering instant loans of HK$3,000. She was redirected to WhatsApp and asked to download an application.
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Speaking to HKFP by phone in mid-July, Mary, who asked to use a pseudonym for fear of repercussions, said she believed the app was “the way to process the loan.”
Soon, HK$1,500 – just half the advertised loan amount – was transferred to Mary’s Alipay mobile wallet. One week later, she was ordered to repay HK$3,000. Unable to do so, she took out a second online loan with the same conditions, then a third, a fourth, a fifth – all from different lenders. Along the way, she provided the information asked of her from online loan providers, including her employment contract and a copy of her passport. She was never asked to sign a contract.
Even as Mary was able to settle some of the debts, others snowballed. The initial 100 per cent interest rate – illegal in Hong Kong – spiralled by 30 per cent per day.
Then, the intimidation began.
Calls were made to Mary’s employer. “Yesterday… I think someone visited our place,” Mary said. And her contact list was apparently extracted from her phone, she thinks through the app she was told to install, with a lender threatening to send pornographic images and a video of Mary to every number she had saved.
She did not tell her family about the harassment. “I don’t want them to be worried,” Mary said, her voice small and timid. She acknowledged that by keeping the issue to herself she was shouldering the burden alone.
“I’m so scared and depressed, and sometimes I cannot sleep,” she said. “I’ve blocked the numbers, but they have new numbers… and they ring again. They call me and they’re telling me words that scare me.”
As she was speaking to HKFP, one of the lenders Mary still owes money to rang her. She did not answer, having earlier lied and told them that her contract had been terminated and she was back in the Philippines. Then, her employer messaged to say the lender had just been in contact with them.
“I don’t know now what to do when I go back to [my employer’s] house, I’m scared now, I don’t know how to explain,” she said, desperation edging into her words. She sniffed, then exhaled sharply, and the conversation was over.
Easy money?
Mary’s experience is not unique. Research by data services company Experian in partnership with Enrich, a charity promoting the economic empowerment of migrant domestic workers, found that 83 per cent of domestic workers in Hong Kong were in debt.
As of June, there were 2,193 licensed money lenders in the city, which are governed by the Money Lenders Ordinance. Under the law, interest rates on loans are capped at 48 per cent per annum, and loans with an effective interest rate exceeding 36 per cent are presumed extortionate and may trigger court proceedings.
However, Mary and other migrant domestic workers HKFP spoke to were not borrowing from licensed lenders but those who dealt exclusively – and anonymously – online, opening the doors to sky-high interest rates and intimidation.
Sheetal Sarup, a personal finance educator and board director at non-profit HELP for Domestic Workers, explained that the interest rates applied to online loans were so high they were “inconceivable.”
“The issue with the interest rate is that the calculation is actually quite opaque and complex,” Sarup told HKFP by phone earlier this month. “Here we’re talking about an interest rate of 100 per cent per month… which means the annualised interest rate is 1,200 per cent, which is way over the legal limit.”
Rachel Li, head of case management and research at HELP, said cases involving aggressive online loans started popping up in March. “Since then, we’re seeing a steady increase in people reaching out for help,” she told HKFP by phone in July, saying that the organisation was currently seeing about three to five cases per month.
“Based on what I’m seeing, it seems that they specifically target migrant domestic workers,” Li said, adding that most of the victims were from the Philippines. “These particular types of loan scammers are more targeted at English-speaking domestic workers, and therefore Filipinos.”
Unlicensed online lending was also on the agenda during a mid-July meeting of the the Progressive Labour Union of Domestic Workers in Hong Kong (PLU).
“As long as the domestic workers have no knowledge about this, then it is easy for them [to fall prey to these lenders], because it is easy money, right?” PLU member Weng said in the union’s Mong Kok office.
“Some people, especially when they are really badly needing money, they will grab this opportunity… but the problem is they don’t know the consequences of what they are doing,” Weng continued. “They don’t know that they are already [being] scammed.”
‘Immense financial pressure’
The reasons debt is so prevalent among migrant domestic workers are manifold.
All this is just connected now, because I have borrowed and borrowed and borrowed. Up to now, I haven’t been free from lending
Mary, Migrant domestic worker
Many, like Mary, are victims of unscrupulous recruiters, often in their home country, who charge workers several times their monthly salary before they have even begun the job.
Mary paid 120,000 pesos (HK$16,000) to an agency in the Philippines before moving to Hong Kong – about equivalent to four months’ earnings. By the time she realised she did not have to pay that much, it was too late.
“All this is just connected now, because I have borrowed and borrowed and borrowed,” Mary, who recently returned to Hong Kong for her fourth two-year contract, said. “Up to now, I haven’t been free from lending.”
Li described this pattern as “the crux of the issue,” pointing to a 2016 report by Justice Centre Hong Kong that estimated the average recruitment debt burden for Filipino workers was HK$16,700, and HK$15,454 for workers from Indonesia. More recently, a survey conducted by social impact start-up HelperChoice in 2021 found that almost half of domestic workers had been overcharged during recruitment.
“Imagine that you get a job, and then the first three months of your salary goes towards paying debt, and on top of that you have expenses, you have family that you send money to, it just keeps piling up and it’s not sustainable for a lot of these women,” Li said. “They are starting work with debts on their back, and that’s a really big issue.”
Another factor is that often migrant domestic workers are the main, sometimes sole, breadwinners of their family.
“There’s immense financial pressure on these women, who may be supporting not just their own children, they also have other siblings who may be going through school, or extended family members, their parents,” Li said.
“Even though the wages they earn in Hong Kong are a lot better than what they can make in the Philippines, they still need to send a lot of money back home and if something happens, the family will call them and say, ‘there’s been an accident, there’s been a typhoon.’ If business is not good or someone’s sick… there’s always a need for more money… and therefore they need to take out loans to fulfil their obligations.”
Rising cost of living
For Angela, who also asked to use a pseudonym, the call came from her daughter.
“She’s still studying, she’s in college. Sometimes, in emergencies, she needs money,” Angela told HKFP by phone in July.
Angela, who felt she “didn’t have any option” as her employer was out of town and so she could not ask them for money, saw a loan advert on Facebook and messaged the WhatsApp number.
“They offer you HK$3,000 but they will give you only HK$1,500,” Angela said. In exchange, the lender asked for “everything,” she added. “My passport copy, my ID, my photos, the address and also photos of my employer, and I needed to take video of my house.”
She provided what they requested. “It’s not normal, but it’s the way they do it, that’s why I sent it,” she said.
A month later, when the repayment date arrived, Angela’s employer was still away and she was not able to pay. She said she asked the lender for more time. Instead, they threatened her.
The lender sent Angela photos of her employer’s home, saying they had people stationed outside ready to vandalise the property. She was inside alone at the time. “How scary is that?” she said. “It was so stressful.”
The lender sent the same photos to Angela’s employer, who confronted Angela. “I said: ‘I borrowed money, I need to pay’,” she recalled, adding that her employer was “very understanding.” They sent her money so she could settle the debt, paying back HK$3,000 despite only receiving HK$1,500.
Angela said she would never again borrow from an online lender, although she still saw loan adverts all over social media. “All the domestic helpers here have all the lending companies they borrow [from],” she said. “That’s the problem, the living costs in the Philippines are very high, but we… don’t have any options sometimes.”
The Philippines has been plagued by high inflation and slow wage growth in recent years. According to a poll published by Pulse Asia Research last month, 72 per cent of Filipinos said that controlling rising food costs should be the government’s priority, ahead of tackling low wages, poverty and joblessness.
The minimum monthly salary for migrant domestic workers in Hong Kong is HK$4,870, plus HK$1,236 allowance for food, although members of the PLU told HKFP that workers did not always receive their food allowance.
“Most of the migrant domestic workers… the wage is not enough for them to support their family back home,” Sheila, a PLU member who joined the meeting by video call from the Philippines, said.
Weng agreed: “Inflation is going up, not just in the Philippines, but also here in Hong Kong. That’s why… the salary is really not enough.”
“It’s time for the government to review our salary, to make it rise, so that we will have… a decent life. When we say decent, that means your salary is enough, you can send your children to school… and then you still have enough money for yourself, because as migrant domestic workers we still have our own personal expenses here, especially on our day off.”
The PLU and other domestic workers organisations across the city are asking for a living wage of around HK$6,300 and food allowance of HK$2,000. “So that in case of emergency, or if we need money, then we have some [savings] if our salary is a little bit higher,” Weng said.
Stress and suicidal thinking
Carmel was paying back a loan from a licensed lender when she took out a second “revolving” loan in January to help cover the repayment costs. “I have to support my family back in the Philippines, but my salary was not enough,” she told HKFP by phone in mid-July, also using a pseudonym.
The revolving loan, so-called because what is borrowed one month is due to be returned the next but can be re-loaned, came with arbitrary fees, “savings,” and conditions – the costs of which changed on a monthly basis. Carmel was originally hoping to borrow HK$1,500 but received just HK$800. Her repayment of HK$1,650 rose to HK$2,500.
As was the case with Mary and with Angela, harassment followed.
Carmel recalled a message she received from a debt collector. “He said they had already reported me to the Immigration [Department] and when I apply [for] a visa again, immigration won’t issue a visa for me,” Carmel said. This was followed by a voice message saying, “pay your loan, your employer said you’re not their helper anymore.”
HELP’s Li said such tactics played on the insecurities of many domestic workers. “They worry about losing their jobs and not being able to support their family and having to go home and incur all that debt again in order to just return to Hong Kong again to work – it’s a really vicious cycle,” Li said.
Carmel said the stress stopped her from sleeping. She was able to keep the worry from her mind while working, but “in the night, instead of sleeping you cannot sleep because you’re thinking,” she said.
“You’re thinking and thinking about what will happen, where this will end up. I was afraid my employer will terminate me… and I’m thinking of my children, that I have to support my family, and what if I get terminated. I had a lot on my mind,” Carmel said. “During the time of the loan, I had suicidal thinking.”
When Carmel’s employer found out about the loan – because the collector had called and threatened them, too – they were understanding. They paid the outstanding debt and directed Carmel to HELP, who referred her to a volunteer counsellor at the University of Hong Kong.
“It helped me a lot, now I have the power to talk,” Carmel said.
A matter for the police
Li, who has helped migrant domestic workers in debt from licensed loan companies in Hong Kong, said online lenders remained something of an unknown.
“We feel that they might have some criminal connections… some of the numbers that message the ladies are from Malaysia and then the threatening messages are written in Simplified Chinese, so it looks like there’s some element of overseas criminal gangs involved, so we’re not comfortable engaging with these lenders directly,” Li said.
HELP works closely with employers, trying to explain “why it is that the worker’s in that situation,” Li said. While some – like the employers of Mary, Angela and Carmel – are supportive, Li acknowledged that other situations ended in the domestic worker’s contract being terminated.
“Our advice currently is for [workers] to report the matter to the police,” Li continued, though she said not a lot of the people she had assisted were willing to do that. “They’re really scared that if they report the matter to police it would affect their employment,” she said.
This is reflected in the number of reports received by police related to violations of the Money Lenders Ordinance, which stood at nine from January to May, up from eight in the same period last year. However, Hong Kong’s crime rate rose by 29 per cent in 2023, led by a surge in fraud cases linked to online scams.
One of the women Li has been working with, however, is preparing a police complaint. “Hopefully that will result in the police taking more proactive actions to address these loan scams.”
Responding to enquiries from HKFP, police said on Thursday they would “continue to closely monitor the trend of improper money lending activities and debt collection practices, including online money lending activities and debt collection practices, and formulate comprehensive preventive and operational strategies in the light of specific circumstances.”
Police would “also continue to engage relevant consulates and local NGOs that work closely with foreign domestic helpers to raise helpers’ awareness about common scams,” they said.
Increased awareness of illegal online lenders was key, the PLU said, calling on the government and the Philippine consulate in Hong Kong to do more.
The Labour Department said in an emailed response to HKFP on Thursday that it had been “earnestly advising [domestic workers] to manage their finances in a prudent manner, not to borrow money and beware of improper money lending facilities.”
For Weng of the PLU, they had not yet gone far enough. “It should be more on awareness and education… instead of blaming the domestic workers, I think it’s also their duty to educate us,” she said.
Responding to enquiries from HKFP, Vice Consul George Soriano, who is also head of the assistance-to-nationals section and a legal officer at the Consulate General of the Philippines in Hong Kong, said the consulate was “well aware” of unlicensed online lenders and had been working to educate Filipino domestic workers.
Soriano pointed to advisories on the consulate’s Facebook page warning against the extortionary practices of such lenders, and said the consulate had partnered with Enrich to “inform our nationals on these predatory lending practices” through a seminar next Sunday.
“Victims are advised to keep a screenshot of their transactions with these illegal online money lending companies and report them to the nearest police station,” Soriano said by email on Wednesday.
He added that the Philippine government’s Migrant Workers Office was “looking at resuming” post-arrival seminars, which were suspended during Covid, for Filipino domestic workers “by August or September of this year,” and that online lenders would definitely be on the agenda.
Mary, Angela and Carmel all said they would never borrow from an online lender again.
“I hope this experience will help other domestic helpers to be careful to borrow from online lenders, because… all the online applications like this, it’s a scam,” Angela said.
| 💡If you are in need of support, please call: The Samaritans 2896 0000 (24-hour, multilingual), Suicide Prevention Centre 2382 0000 or the government mental health hotline on 18111. The Hong Kong Society of Counselling and Psychology provides a WhatsApp hotline in English and Chinese: 6218 1084. See also: HKFP’s comprehensive guide to mental health services in Hong Kong. |
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