Code of Conduct for Debt Collectors

The Senior Minister of State for Law (Ms Indranee Rajah)(for the Minister for Law):Madam, creditors, such as banks, licensed moneylenders or judgment creditors, can and do take steps to recover their debts and may engage debt collectors to do so on their behalf. The actions taken by creditors or debt collectors in collecting debts cannot contravene the law. So, for example, the Penal Code makes it an offence if hurt or threatening behaviour is involved. In addition, the new Protection from Harassment Act provides civil and criminal remedies against unreasonable harassing behaviour.

Where licensed moneylenders are concerned, the Registry of Moneylenders conducts checks to ensure that persons who have previously engaged in criminal conduct are not allowed to assist in any aspect of the moneylending business, including the collection of debts. Borrowers who encounter criminal behaviour from licensed moneylenders or their debt collectors should report the matter to the Police or the Registry of Moneylenders. Moneylenders found to have committed offences may have their licences suspended, not renewed or revoked by the Registry.

The Advisory Committee on Moneylending was set up last year to review the moneylending regime. The Committee will also be looking at the conduct of debt collectors engaged by moneylenders. The Committee targets to issue its final report by the first quarter of 2015.

Madam, I thank the Senior Minister of State for her response. I have two supplementary questions. I understand that there are boundaries that debt collectors do not cross over as they can be prosecuted because it becomes criminal. But given that some of the tactics they employ may not cross that line, and given the prevalent use of abusive practices by debt collection agencies or moneylenders, I would like to ask the Senior Minister of State whether she would consider instituting laws that govern fair debt collection practices, such as those that have been implemented in Malaysia, Thailand and the United States. Secondly, will the Senior Minister of State specifically consider prohibiting tactics, such as those that we often hear from our residents, for example, contacting persons other than the debtor in an effort to recover debts, such as harassing family members and relatives; exposing the debtor's indebtedness to other people in an effort to humiliate him, such as faxing demand letters to people's workplaces; carrying out debt collection activities —

Madam, I thank the Member for her supplementary questions. Actually, we can look at it at three levels. The first level is really where debt collectors engage in criminal conduct. This clearly steps across the line. So, for example, you could have people causing hurt or behaving in an intimidating or threatening manner. That is criminal and it falls within the area of criminal sanctions and penalties. And, for those, there is a clear legislative regime to work towards that.

The examples that the Member cited actually fall into another category. I think what the Member is saying is that there are some types of conduct which are not clearly criminal offences but are, nevertheless, harassing in any event. This is where the Protection from Harassment Act comes in, because that came into force only very recently. Prior to that, a large amount of this type of conduct really did not have much redress. But now that you have the Protection from Harassment Act, there are actually two options under that Act. There are some acts which will, again, fall into a criminal category and then there are some, like faxing letters, turning up at the workplace, which may not necessarily be criminal but they do cause alarm, distress and harassment in any event, in which case, there are civil remedies and the borrower can actually go to the State Courts and file a complaint.

Then I think there is one more category which the Member is urging us to look at, which is that, apart from these sanctions, can we consider guidelines or an indication to the industry of what are the appropriate practices to follow? That is something which currently falls within the purview of the Advisory Committee on Moneylending. The report is expected, as I have indicated earlier, in the first quarter of 2015. So, what MinLaw would like to do is to wait for the report, then we will review it and see if there are steps that should be taken in this regard.