The Hong Kong Monetary Authority (HKMA) has today issued a circular to banks requiring them to, when using services provided by intermediaries or sales agents, further enhance the protection of the interests of bank customers and to reduce the potential risks to the reputation of banks arising from possible malpractices of these parties. The guidance issued by the HKMA includes:
(1) Authorized institutions (AIs) should cease as soon as practicable the use of intermediaries for the purpose of sourcing retail consumer financial products or services such as personal loans, tax loans and credit cards. However, this requirement is not applicable to the engagement of intermediaries in respect of collateralised lending such as mortgages, taxi, public light bus and machinery loans, hire purchase agreements as well as corporate business finance.
(2) AIs should critically review the control measures in place to ensure customer data of bank customers are properly safeguarded during the product selling process of the sales agents (either through telemarketing or some other forms) as well as by bank staff. The review report should be completed, in phases, within four months and submitted to the HKMA.
Mr Arthur Yuen, Deputy Chief Executive of the HKMA, said, “We would like to draw the attention of the public to the fact that, in accordance to the requirements of today’s circular, marketing of bank products and services will only be conducted by bank staff or sales agents engaged and duly authorized by banks. Banks will not use referral services offered by intermediaries in respect of applications for personal loans, tax loans or credit cards. If going forward there are intermediaries claiming to be associated with banks and able to provide referral services in respect of retail consumer finance products or services by charging a handling fee or other fees, the public should be aware that such arrangements are not authorised by banks and may involve fraudulent acts. The public should be alert to the associated risks and should not provide any sensitive personal information to such intermediaries. In case of doubt, they should contact the banks concerned directly or report to the Police.”
Hong Kong Monetary Authority
7 August 2015