Government responds to LRC report on debt collection
practices
***************************************************** The Security Bureau today (September 9) released the Administration's response to the Law Reform Commission (LRC) Report on the Regulation of Debt Collection Practices.
The Administration's response is the product of an inter-departmental group set up to study the findings and recommendations of the LRC report. The Administration was most grateful to the LRC for its detailed work and valuable views and suggestions, a spokesman for the bureau said.
"The Administration agrees with the LRC that credit providers and their agents are entitled to take reasonable steps to recover their debts. An appropriate balance should be struck between the legitimate needs of creditors to collect debts on the one hand, and the rights of debtors not to be subject to unreasonable pressure and of third parties not to be unduly disturbed on the other," the spokesman said.
"The Administration has been adopting a multi-disciplinary approach in addressing the various issues arising from, and related to, delinquent debts. The agencies concerned are already taking proactive measures to tackle the problems associated with debts from different perspectives," he said.
As far as the existing criminal sanctions and enforcement are concerned, a number of legislative provisions are already in place to tackle illegal practices employed by debt collection agents. These provisions cover offences including intimidation and assaults under the Crimes Ordinance; blackmail under the Theft Ordinance; and sending letters threatening murder under the Offences Against the Person Ordinance.
On the support side, counselling services and welfare assistance are provided to those with debt problems by the Social Welfare Department and non-governmental organisations. The Housing Department may also offer various forms of housing assistance to people with debt problems.
Separately, the Judiciary has taken a number of initiatives to improve efficiency in the judicial process. Though not specifically targeted at the problem of debt collection, this has helped provide a more efficient and accessible judicial channel for various users of the system, including creditors.
On the LRC's recommendation to create an offence of harassment of debtors and others, the spokesman said the Administration was of the view that the existing legislative provisions were sufficient to combat most of the undesirable debt collection activities. "The Administration does not consider that there are strong justifications for introducing a stand-alone piece of legislation to outlaw the residual elements (chiefly stalking and similar activities that are malicious in nature) of the proposed offence of harassment in relation to debt collection alone. However, we will consider the subject in the context of the study on the LRC Report on Stalking," he said.
On the recommendation of the introduction of a statutory licensing system, the Administration considers that the justifications set out in the LRC Report do not constitute a sufficient case to introduce such a regime. In particular, it is doubtful whether a licensing system would be an effective means of regulating the conduct of the debt collection industry. Judging from the operational experience of the enforcement agencies, delinquent operators are unlikely to come forward to license their operations. The system would be likely to cover only prudent and ethical market operators, who did not engage in abusive activities even in the absence of a licensing regime.
As regards the LRC's recommendations relating to reviewing the sharing of consumer credit data, the spokesman said the Administration agreed with the LRC that greater sharing of consumer credit data should be kept under review with a view to further alleviating bad debts and abusive debt collection practices. In this regard, considerable progress, including the greater sharing of positive credit data since June, 2003, had already been made following the publication of the LRC Report in July, 2002.
"The Administration will continue its rigorous enforcement of existing laws and the adoption of a multi-disciplinary mode in providing the necessary infrastructure, support, service and statutory safeguards to the various parties in dealing with problems associated with undesirable debt collection practices," the spokesman said.
The full text of the Report on the Administration's response can be viewed at the Security Bureau website (www.sb.gov.hk).
practices
***************************************************** The Security Bureau today (September 9) released the Administration's response to the Law Reform Commission (LRC) Report on the Regulation of Debt Collection Practices.
The Administration's response is the product of an inter-departmental group set up to study the findings and recommendations of the LRC report. The Administration was most grateful to the LRC for its detailed work and valuable views and suggestions, a spokesman for the bureau said.
"The Administration agrees with the LRC that credit providers and their agents are entitled to take reasonable steps to recover their debts. An appropriate balance should be struck between the legitimate needs of creditors to collect debts on the one hand, and the rights of debtors not to be subject to unreasonable pressure and of third parties not to be unduly disturbed on the other," the spokesman said.
"The Administration has been adopting a multi-disciplinary approach in addressing the various issues arising from, and related to, delinquent debts. The agencies concerned are already taking proactive measures to tackle the problems associated with debts from different perspectives," he said.
As far as the existing criminal sanctions and enforcement are concerned, a number of legislative provisions are already in place to tackle illegal practices employed by debt collection agents. These provisions cover offences including intimidation and assaults under the Crimes Ordinance; blackmail under the Theft Ordinance; and sending letters threatening murder under the Offences Against the Person Ordinance.
On the support side, counselling services and welfare assistance are provided to those with debt problems by the Social Welfare Department and non-governmental organisations. The Housing Department may also offer various forms of housing assistance to people with debt problems.
Separately, the Judiciary has taken a number of initiatives to improve efficiency in the judicial process. Though not specifically targeted at the problem of debt collection, this has helped provide a more efficient and accessible judicial channel for various users of the system, including creditors.
On the LRC's recommendation to create an offence of harassment of debtors and others, the spokesman said the Administration was of the view that the existing legislative provisions were sufficient to combat most of the undesirable debt collection activities. "The Administration does not consider that there are strong justifications for introducing a stand-alone piece of legislation to outlaw the residual elements (chiefly stalking and similar activities that are malicious in nature) of the proposed offence of harassment in relation to debt collection alone. However, we will consider the subject in the context of the study on the LRC Report on Stalking," he said.
On the recommendation of the introduction of a statutory licensing system, the Administration considers that the justifications set out in the LRC Report do not constitute a sufficient case to introduce such a regime. In particular, it is doubtful whether a licensing system would be an effective means of regulating the conduct of the debt collection industry. Judging from the operational experience of the enforcement agencies, delinquent operators are unlikely to come forward to license their operations. The system would be likely to cover only prudent and ethical market operators, who did not engage in abusive activities even in the absence of a licensing regime.
As regards the LRC's recommendations relating to reviewing the sharing of consumer credit data, the spokesman said the Administration agreed with the LRC that greater sharing of consumer credit data should be kept under review with a view to further alleviating bad debts and abusive debt collection practices. In this regard, considerable progress, including the greater sharing of positive credit data since June, 2003, had already been made following the publication of the LRC Report in July, 2002.
"The Administration will continue its rigorous enforcement of existing laws and the adoption of a multi-disciplinary mode in providing the necessary infrastructure, support, service and statutory safeguards to the various parties in dealing with problems associated with undesirable debt collection practices," the spokesman said.
The full text of the Report on the Administration's response can be viewed at the Security Bureau website (www.sb.gov.hk).
Ends/Friday, September 9, 2005
Issued at HKT 14:01
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