Police have crushed a loan shark group that gets customers by cold calls and baits them with claims like “no charge if case is not successful”.
However, customers often got a loan that was much less or more than the amount they wanted to borrow, and were then forced to pay a service charge of 25 percent to 40 percent if they refrained from borrowing, Ming Pao Daily reported Friday.
In an operation named “Firecobbler”, police on Thursday arrested 27 staff members aged between 20 and 54 in two financial companies in Kwai Tsing district.
They are suspected of offering ultra-high interest rate loans, money-laundering, extortion, criminal intimidation, false imprisonment and theft, the report said.
Police have received reports from 13 victims in the past six months and it is believed that victims number about 500.
One victim said he received a phone call from a financial firm half a year ago and was talked into going to its office to borrow HK$300,000 (US$38,701). He submitted the original document of his housing assignment.
The words, “no need to pay any fee if application is unsuccessful”, were printed in large fonts on the company’s forms.
But the company suggested he borrow HK$600,000 instead.
When the victim refused to do so, the agent said that he had to pay a service charge of HK$100,000 if he failed to comply with the contract terms, which were in very small print at the bottom of the contract.
The victim then received many intimidating phone calls from the company. He was also detained for 45 minutes by some roguish people when he wanted to talk to the agents to get back his housing assignment.
In the end, the men forcefully took him to the bank to obtain HK$100,000.
In another case, a victim who borrowed HK$3,000 from the company had to return HK$16,200 in one year, at an annual interest rate of 550 percent.
Police also seized HK$920,000 in cash, eight computers and about 2,000 loan application forms.
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