6 August 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 second 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, 164 of the 216 surveyed authorized institutions (AIs) did not employ any DCAs. For the 52 AIs using the services of DCAs, they had altogether assigned 184,772 accounts to 33 DCAs.

28 of these 52 AIs received a total of 181 complaints against 21 DCAs (compared with 231 complaints received by 29 AIs against 22 DCAs in the previous quarter). On average, the incidence of complaints per 1,000 accounts assigned decreased to 0.98 from 1.29. 13 complaints were lodged by unrelated third parties, versus 14 in the first quarter. 24 AIs using the services of DCAs did not receive any complaints.

Three instances of substantiated breach of the Code of Banking Practice were reported, the same as in the previous quarter. These cases involved pestering the debtor's family, sending unidentifiable notices, failure to record dunning action or pursuing debts at address known to be outdated. The AIs concerned have taken disciplinary action against the DCAs.

Since the inception of the DCA survey, the number of DCA complaints has decreased from 374 in Q2 2002 to 181 in Q2 2003. The incidence of DCA complaints has also decreased from 1.9 per 1000 accounts assigned to 0.98 for the corresponding period. I would like to congratulate institutions for their efforts in this regard. AIs should however continue to monitor the performance of their DCAs.

We hope you will find the information useful.

Yours faithfully,

Raymond Li
Executive Director (Banking Development)

Survey on DCA complaints received by AIs - Q2/2003

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