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LCQ 11: Combating illegal debt collection activities

     Following is a written reply by the Secretary for Security, Mr Lai Tung-kwok, to a question by the Hon Albert Chan Wai-yip in the Legislative Council today (July 4):


     In its reply to my question at the Council meeting of June 22, 2011, the Government indicated that the Police attached great importance to combating illegal debt collection activities conducted by debt collection agencies (DCAs).  However, I have learnt that the situation of debtors being harassed by DCAs in their debt collection activities is deteriorating recently, and it is still common for banks, finance companies, telecommunications service companies, beauty service companies and tutorial teachers to hire DCAs to collect money owed by their customers.  In this connection, will the Government inform this Council:

(a) of the number of cases about harassment by DCAs reported by the public to the Police since June 22 of last year;

(b) whether the Government will, in view of the aforesaid situation, consider afresh accepting the recommendations in the report of the Law Reform Commission of Hong Kong on "The Regulation of Debt Collection Practices" published in 2002 that a criminal offence of harassment of debtors and others should be created, and that a statutory licensing system to monitor DCAs should be established; if it will, of the details; if not, the reasons for that; and

(c) whether it will consider introducing new enforcement measures to curb the harassing practices adopted by DCAs to recover debts; if it will, of the details; if not, the reasons for that?



     The Government is concerned about the nuisance of improper debt collection practices caused to the public and has adopted a multi-pronged approach to prevent and combat such practices through measures including strengthening enforcement and close monitoring the debt collection practices of relevant sectors by regulatory authorities.  The number of such reports made to the Police decreased from 16,542 in 2007 to 11,610 in 2011, representing a drop of 29.8%.  The reply to the three parts of question is as follows:

(a) In 2011, the Police received a total of 1,859 debt collection-related crime reports and 9,751 harassment reports unrelated to crime.  The total number of reports decreased by 15.2% when compared with 2010.  In the first four months of this year, i.e. January to April 2012, the Police received a total of 641 debt collection-related crime reports and 3,092 harassment reports unrelated to crime.  The total number of reports also decreased by 4.8% as compared to the same period in 2011.

(b) As regards the Law Reform Commission's (the LRC) report on "The Regulation of Debt Collection Practices", the Administration, after thorough consideration, made a detailed response to the report in September 2005.  On the whole, a number of legislative provisions are already in place to combat various illegal debt collection practices.  We are of the view that there is no need to introduce new criminal offence provisions or a separate licensing scheme in respect of operation of debt collection agencies.  The Police will enforce the law rigorously, and conduct investigations and prosecute any crime-related debt collection practices.  For other improper debt collection cases that are non-criminal, the Police will continue to coordinate with related government departments and regulatory authorities in handling these cases.

     Regarding stalking in relation to debt collection activities, the Constitutional and Mainland Affairs Bureau (CMAB) published a consultation paper on stalking last year to consult the public on the proposal to legislate against stalking and the key elements of the proposed legislation.  CMAB is consolidating and analysing the views received during the public consultation.

(c) The Police attach great importance to combating illegal debt collection activities, and have adopted pro-active measures to enhance the effectiveness of enforcement actions.  Apart from setting up a dedicated team to closely monitor the trend of improper debt collection practices in various districts of the territory, and to formulate comprehensive preventive and operational strategies having regard to specific circumstances, the Police will continue to, through stepping up patrol and co-operating with property management companies in their respective districts, prevent illegal or improper debt collection activities in housing estates and buildings as well as publicity activities of loansharking syndicates in these properties.

     In handling individual cases, the Police will continue to implement internal guidelines formulated for handling of reports of improper debt collection practices.  Debt collection cases involving criminal offences, such as those involving criminal damage or intimidation, will be referred to the dedicated criminal investigation teams for investigation.  The objective is to enable the teams to carry out investigations and gather evidences by pooling together experiences and expertise, and institute criminal prosecution in accordance with the law.
     For reports that may not involve criminal offences at the moment, the Police will assess each case on the possibility of debt collection practices turning into criminal offences, and then categorise it as "high threat" or "low threat" case.  "High threat" cases will be referred to the criminal investigation teams for follow up.  As regards "low threat" cases, the Police will continue to monitor their developments.  Once there are signs that the seriousness of the case has heightened, the criminal investigation teams will take over the investigation.

     If a debt collection agency employed by any licensed money lender, bank or financial institution is suspected to be collecting debts by improper or illegal means, the Police will coordinate with the regulatory authority concerned which will look into the matter and take follow up action on the debt collection agency employed.  In addition, the Companies Registry will consult the Police in handling every application for money lenders licences (including application for renewal).  The Police will consider all relevant factors, including complaint records of the money lenders, when deciding whether to support the above applications.  Starting from January 2011, the Licensing Court has accepted the Police's suggestion to include new licensing conditions when considering applications for money lenders licences.  These conditions include requiring money lenders and their debt collection agencies not to harass any persons when locating their debtors and not to adopt illegal or improper debt collection practices.  This is to further regulate debt collection practices related to licensed money lenders.  The Police believe that these new measures would contribute to combating improper debt collection activities.

     In addition to enforcement, the Police also publicise successful enforcement operations and prosecutions to deter improper debt collectors or debt collection agencies from engaging in illegal debt collection practices.  Furthermore, the Police urge the public to choose licensed money lenders or institutions and consider their repayment ability prudently when applying for a loan so as to reduce the chance of being harassed by improper debt collection practices in future.

Ends/Wednesday, July 4, 2012
Issued at HKT 15:22


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