News Forum

New Recommendations of Law Reform Commission Worries Debt Collection Practitioners

Source: South China Morning Post - July 30, 2002

The vice-chairman of the Hong Kong Credit and Collection Management Association, Bobby Rozario, welcomed the licensing proposal, saying it could help distinguish legitimate debt collectors from illegal ones, who had tarnished their image.

But he also said he was worried that the proposal to create a criminal offence of the harassment of debtors would affect their operation. Mr Rozario said such a law could lead to debtors abusing the law if it was not clearly defined.

Under the commission's suggestions, it would be an offence for a debt collector to harass debtors with payment demands which, by their frequency or manner, were likely to subject those in debt or their families to alarm, distress or humiliation.

Mr Rozario said debt collectors were hoping to work out the details with the government through the proposed licensing authority, which the commission suggested could formulate the code of practice with the industry.

He said they hoped the harassment offence would be well-defined as some cases involved debt collectors being harassed - or even assaulted - by debtors.

"Some debtors call us at night, leave dirty words in our voice- mail and come and yell at you at the office," Mr Rozario said.

"If action A done to B is an offence but the same action B done to A is not an offence, this would be hard to understand."

The manager of one debt-collection company, a Mr Lam, also called for balance on the definition of "harassment", adding his firm had already spelt out a code of practice for its staff.

Another veteran debt-collection agency operator shared the concerns over the creation of a harassment offence.

"How would you define harassment? Should three, five or 10 calls a day be counted as a nuisance?" the operator asked.

"You'll have to give us room to survive, otherwise no one will repay debts in Hong Kong."

A former debt collector questioned whether the proposal could effectively wipe out black sheep in the industry.

"Licensing would not be a problem to them as they won't call themselves debt-collection agencies. They call themselves `service companies'," the debt collector said.

He said some of the debt collectors who would share a portion of any successfully collected debt would use radical means to get the money, such as splashing paint, jamming door locks, making dozens of telephone calls or sending continuous faxes to the debtor's office.

The government should control abusive debt-collection activities from the source of the problem by requiring banks and finance companies to grant loans according to the debtor's earning capacity and ability to repay, the collector said.

Democrat legislator Albert Chan Wai-yip believed the Law Reform Commission's proposal could help regulate collection agencies that imposed threats on debtors by adopting triad-style practices.