Complaints Against Debt Collection Agents Employed by Authorized Institutions

Our Ref:

B1/1C
B9/67C

26 February 2010

The Chief Executive
All Authorized Institutions

Dear Sir/Madam,

Complaints Against Debt Collection Agents
Employed by Authorized Institutions

I write to inform you of the results of the industry survey on complaints against debt collection agents (DCAs) employed by authorized institutions (AIs) for the fourth quarter of 2009. Please see the Annex for details.

During the reporting period, 37 AIs used the services of DCAs, assigning 96,866 accounts to 24 DCAs.

A total of 27 complaints against 9 DCAs were received by 8 AIs (compared with 16 complaints against 6 DCAs received by 6 AIs in the previous quarter). The incidence of complaints per 1,000 accounts assigned increased to 0.28 from 0.17 in the previous quarter. No complaints were lodged by unrelated third parties, compared with one in the previous quarter.

As in the previous quarter, one instance of a breach of the Code of Banking Practice was reported during the quarter. In this case, the DCA concerned disclosed the indebtedness of the debtor to a member of the debtor's family. The AI concerned has issued a warning letter to the DCA.

I would like to take this opportunity to remind all AIs of the need to monitor the activities of their DCAs vigilantly and to establish proper systems and procedures for doing so in accordance with section 39 of the Code of Banking Practice.

Yours faithfully,

Karen Kemp
Executive Director (Banking Policy)

Encl

c.c. The Chairman, Hong Kong Association of Banks
The Chairman, The DTC Association
Secretary, Code of Banking Practice Committee
(Attn: Ms Rita Liu - HKAB)
Secretary for Financial Services and the Treasury
(Attn: Miss Clara Chan)

Annex

Survey on DCA complaints received by AIs - Q4/2009

Table 1: AIs using DCA service

Table 2: Number of DCAs employed by AIs

Table 3: Incidence of DCA complaints

Table 4: Status of complainants