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Following is a question by the Hon Mrs Sophie Leung and a written reply by the Secretary for Home Affairs, Mr W K Lam, in the Legislative Council today (February 14):

Question:

It has been reported that there is an increasing trend of credit card holders being unable to make credit card repayments after spending or borrowing with multiple credit cards, and in one such case the cardholder owed debts involving 57 credit cards. In this connection, will the Government inform this Council:

(a) whether it will consider amending the Code of Practice on Consumer Credit Data to allow credit reference agencies to collect more comprehensive personal credit information for the reference of credit card issuers in vetting credit card applications; if so, of the details; if not, the reasons for that; and

(b) of the means to raise the public's awareness of good financial management, such as reminding them to live within their means when using credit cards and promoting the use of direct debit cards, in order to reduce the incidence of failure to clear credit card debts?

Reply:

Madam President,

Part (a):

The Code of Practice on Consumer Credit Data ("The Code") was published by the Privacy Commissioner for Personal Data ("PC") under the Personal Data (Privacy) Ordinance. The PC is an independent authority. He published the Code in 1998 after consideration of the views collected from a public consultation exercise.

In order to protect privacy, the Code, among other things, limits the information that credit reference agencies may collect and disclose about individual borrowers. The main items of information that a lender may disclose to a credit reference agency include information relating to:

* any default in making a repayment;

* any application for credit within the previous 90 days;

* any loss of a credit card by the lender that has resulted in the lender suffering a financial loss due to an unauthorised transaction on the lost credit card; and

* a motor vehicle or equipment that is subject to a hire-purchase or leasing arrangement with the lender.

In addition, a credit reference agency may also collect information about a person from official public records about any court actions against him to recover monies owed, judgements for monies owed and declarations and discharges of bankruptcy.

The PC considers that the current provisions in the Code strike a balance between the protection of personal data and financial risk management of credit providers. However, he has on-going liaisons with relevant parties including the Hong Kong Monetary Authority ("HKMA") and credit reference agencies, and has been reviewing the provisions of the Code.

HKMA has initiated discussions with the PC on expanding the use of credit information from the angle of enhancing banks' credit risk management and alleviating abusive debt collection practices. The Debt Collection Sub-Committee of the Law Reform Commission, which has recommended in a consultation paper a review of the existing limitations on the collection and use of certain credit data, is studying the public comments received on the paper.

Part (b):

The question of living within one's means should more appropriately be a matter of the individuals' judgement. Our education curriculum has included components to equip students with knowledge on personal finance and investment.

In secondary schools, elements of personal finance and investment, in terms of knowledge, skills and values, are currently covered in a number of subjects such as Economics, Economics and Public Affairs, Commerce, Principles of Accounts and Home Economics.

The Curriculum Development Council has included personal finance and investment education as learning objectives in the consultation documents of the Key Learning Areas of Technology Education and Personal, Social and Humanities Education. The consultation period will end on February 15, 2001 and the final report will be ready by June/July 2001.

Students of tertiary institutions can enhance their understanding on personal finance and investment by ways such as taking relevant courses or joining relevant interest groups (e.g. investment clubs). If students encounter any problems on personal finance, they can seek assistance and advice from their respective Student Affairs Office.

End/Wednesday, February 14, 2001

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