7 May 2003

Dear Sir / Madam,

Complaints against Debt Collection Agents
employed by Authorized Institutions

I write to inform you of the main results of the industry survey on complaints against debt collection agents (DCAs) for the first quarter of 2003. Please see Annex for details. The latest survey results show a continued improvement in the number and incidence of complaints.

During the reporting period, 163 of the 217 surveyed authorized institutions (AIs) did not employ any DCAs. For the 54 AIs using the services of DCAs, they had in aggregate assigned 178,917 accounts to 29 DCAs.

29 of these 54 AIs received a total of 231 complaints against 22 DCAs (compared with 260 complaints received by 25 AIs against 23 DCAs in the previous quarter). On average, the incidence of complaints was 1.29 complaints per 1,000 accounts assigned, down from 1.34 in the fourth quarter. 25 AIs using the services of DCAs did not receive any complaints. Meanwhile, the number of complaints lodged by innocent third parties decreased to 14 from 16.

Three instances of substantiated breach of the Code of Banking Practice were reported, as compared with five in the fourth quarter of 2002. These cases involved sending unidentifiable notices or using false names when communicating with the debtor. The AIs concerned have taken disciplinary action against the DCAs.

Despite the encouraging improvement in complaints, which indicates that AIs have stepped up their monitoring of the activities of their DCAs, it is important for AIs to remain vigilant in this respect.

We hope you will find the information useful.

Yours faithfully,

Raymond Li
Executive Director (Banking Development)

Annex

Survey on DCA complaints received by AIs – Q1/2003

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