11 November 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 third quarter of 2003. Please see Annex for details. The latest survey results continue to show improvements in the number and incidence of complaints.

During the reporting period, 164 of the 212 surveyed authorized institutions (AIs) did not employ any DCAs. For the 48 AIs using the services of DCAs, they had altogether assigned 197,281 accounts to 32 DCAs.

25 of these 48 AIs received a total of 166 complaints against 22 DCAs (compared with 181 complaints received by 28 AIs against 21 DCAs in the previous quarter). On average, the incidence of complaints per 1,000 accounts assigned decreased to 0.84 from 0.98. 16 complaints were lodged by unrelated third parties, versus 13 in the second quarter. 23 AIs using the services of DCAs did not receive any complaints.

One instance of substantiated breach of the Code of Banking Practice was reported, as compared with 3 in the previous quarter. The DCA failed to verify information obtained through public sources and pursued debt wrongly from the complainant who happened to have the same name as the debtor. The AI concerned has taken disciplinary action against the DCA.

The continued reduction in the number of DCA complaints is encouraging. However, it is important for AIs to remain vigilant in monitoring the performance of their DCAs.

We hope you will find the information useful.

Yours faithfully,

Raymond Li
Executive Director (Banking Development)

Annex

Survey on DCA complaints received by AIs – Q3/2003

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