Does Hong Kong’s loan shark law proposal lack bite needed to tame debt collectors?
Lawmakers urge end to ‘vicious cycle’ where lenders dish out risky loans knowing they can use aggressive enforcement tactics
The legislators and specialists criticised the Financial Services and the Treasury Bureau’s plan to set a cap on borrowing activity for low-income earners and impose stricter rules for loan “referees”, saying it failed to tackle the shadowy network of intermediaries who enabled predatory lending.
“Harassment is against the law, but harassment happens every day,” lawmaker Michael Tien Puk-sun said. “People wonder if there is lawlessness in Hong Kong.”
Last year, the registry received 214 complaints, conducted 561 inspections and issued 22 warning letters. These included 58 complaints involving domestic helpers, of which 18 directly concerned moneylenders harassing loan referees.
The names of referees are generally provided by a borrower to lenders when taking out a loan. Legally, a referee cannot be held liable for a loan and must provide written consent to be listed. But in practice, debt collectors are known to hound them to put pressure on the actual debtor.