A loan shark syndicate, which charged an annual interest rate of 1,000 per cent, was broken up with 14 people arrested in raids over the past two days, police said yesterday.
Ten men and four women, aged 17 to 51, were detained, including the alleged head of the syndicate and directors and staff members of two financial consultancy firms.
The raids by more than 60 crime-squad officers at 20 locations came after an 11-month investigation. Loan applications, computers, bank books and cards, and mobile phones were seized in the operation.
Police were tipped off by a worker who borrowed HK$5,000 from a loan shark ring in 2008 and sought help from police last year when he was told he still owed the principal, even after paying more than HK$32,000 in interest. The man, who received only HK$4,300 from the syndicate in October 2008 after the deduction of the first interest payment, told police he had to pay HK$2,250 in interest every month.
After making more than HK$32,000 in interest payments over 14 months, he still owed HK$5,000. Police said the victim was charged at an annual rate of 920 per cent.
As he was unable to pay the interest in January last year, he received warning letters and nuisance calls before red paint was poured over the front door of his flat. He contacted police last February.
Another victim, who borrowed HK$2,000 from the same syndicate, but received only HK$1,600, was told he still owed HK$2,000 after paying HK$4,800 in interest. He also sought help from police in March last year after he was unable to make any interest payments and was threatened by the gang. This man, who was forced to pay HK$300 in interest every 10 days, was charged at an annual rate of 1,027 per cent, police said. It was the highest rate charged by the syndicate. The maximum legal interest rate is 60 per cent.
