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Code of Practice on use of debt recovery agencies issued
Two chapters of the Code of Banking Practice (the Code) on personal referees and the use of debt collection agencies were issued by the Hong Kong Monetary Authority (HKMA) today (Tuesday) to provide further guidance to authorised institutions.
"The publication of these detailed guidelines should help promote best practices among authorised institutions and substantially reduce the complaints about improper behaviour of debt collection agencies appointed by authorised institutions.
"Institutions are expected to comply as quickly as possible with the requirements of the two chapters," said acting Deputy Chief Executive of HKMA, Mr Y K Choi.
The Code states clearly that referees have no legal or moral obligation to repay the liabilities of an institution's customers unless they have entered into a formal agreement to guarantee such liabilities.
It also requires authorised institutions to ask their customers to obtain prior consent of the referees for their names to be used. Institutions are not allowed to pass information about referees to their debt collection agencies.
On the use of debt collection agencies, the Code requires authorised institutions to specify in contract or by written instructions that their agencies must not resort to intimidation or violence, either verbal or physical, against any person in their debt recovery actions.
It also sets out practices which institutions should adopt in appointing and managing debt collection agencies, including the need to establish effective procedures to monitor the performance of their agencies and to respond promptly to complaints about their agencies.
subside.
"We believe that the problems relating to these two issues would largely
"But if the public has any further complaints about improper behaviour of debt collection agencies appointed by authorised institutions, they can call the HKMA complaint hotline at 2878 1378.