MANILA, Philippines—The Philippine Overseas Employment Administration warned Hong Kong-based recruitment agencies on Friday that they could lose their accreditation for collecting placement fees from Filipino household service workers.
The warning came after the POEA received information that some Philippine-accredited agencies in Hong Kong collect placement fees from household workers through an “imaginary loan” or an ATM account, said POEA chief Hans Leo Cacdac.
The Philippine Consulate in Hong Kong has already issued a memorandum to all accredited Hong Kong agencies with a warning that the Philippine government will not tolerate these malpractices, he added.
“Any violation committed by the Hong Kong agency will be dealt with seriously and this office (Consulate General of the Philippines) will apply the full force of Philippine laws,” said Labor Attaché Manuel Roldan of the Philippine Overseas Labor Office in Hong Kong.
He said penalty includes suspension or cancellation of the agency’s accreditation with the Philippine Consulate and the POEA.
Roldan reported that through the “imaginary loan,” a worker is brought to a lending company either in the Philippines or Hong Kong to sign a loan agreement but does not receive the loan proceeds.
The worker is then issued a card and advised to pay the loan on installment basis through a convenience store.
“The agency keeps the worker’s passport or employment contract and this is returned to the worker upon full payment,” Roldan said.
In an ATM account, the agency assists the worker in opening a savings account and keeps the ATM card. The employer is then advised to deposit the salary of the worker to that account.
The agency, however, withdraws the worker’s salary, and gets its share as placement fee, then gives the remaining cash to the worker.
“These practices are highly irregular and illegal as they violate the ‘no placement fee policy’ of the Philippine government,” Roldan said.
He added that this also violates the legally allowed agency commission in Hong Kong which is only 10 percent of the monthly salary of the worker.