(b)
(ii)
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issuing a letter in January 1996 to the banking industry associations to remind authorised institutions (Als) under the Banking Ordinance that they should satisfy themselves that applicants for personal loans or credit cards have obtained the prior consent of the referees before the latters' names are entered into the application forms;
establishing a complaint hotline on 22 April 1996 so that the HKMA can monitor closely the propriety of the debt recovery actions of agencies employed by Als and, if necessary, follow up with individual institutions to rectify any weaknesses in their management of debt collection agencies; and
(iii) issuing a letter on 22 April 1996 to the banking industry associations to stress that the employment of debt collection agencies which use improper means to recover debts is unacceptable and the need for AIs to exercise strict control over their agencies.
The HKMA will closely monitor the complaints received through the complaint hotline. If it appears that there is a significant number of legitimate complaints, further action to restrict the use of debt collection agencies will be considered. Furthermore, in the light of public concern, the Working Group on the Code of Banking Practice (Working Group) will consider whether the sections of the Code on referees and debt collection agencies should be prepared and issued in advance of the rest of the Code.
The Working Group will give due consideration to the specific points referred to in part (b) of the question in developing the Code -
(1)
the Administration supports the principle that referees' consent must be obtained before their names are entered into the application forms as set out in HKMA's letters to the banking industry associations in January 1996. The means of obtaining such consent will be further examined in the context of the Code, taking into account the need to strike a balance between the need to verify such consent and the operational efficiency of institutions and cost implications for customers;