Debt collector spurns bully tactics
Experienced agent says trying to harass people into paying up simply does not work
Smiling and affable, Mr Chan could be easily mistaken for an ice-cream seller, but he represents the reason the government has decided against regulating debt collecting, one of the most controversial industries in the city.
For the past eight years, he has chased down everything from a few hundred dollars in overdue phone bills to tens of thousands in unpaid credit-card loans.
But ask him whether he uses the sort of collection tactics that make headlines in the press - doorsteps splashed with red paint, handwritten notices signed 'or else', or locks jammed with glue - and Mr Chan says they simply fail to produce results. Acting tough makes it tough for business.
'The people will just call the cops, and you'll be out of there in no time. All we really can do is be reasonable and try to coax people to pay.'
Further dispelling the stereotype, he added: 'We don't actually go to visit the people we collect money from very often. Most of the work of contacting the debtors and persuading them to either pay or restructure their loans can be accomplished on the telephone. The one or two visits a month we do pay during daytime are usually dead ends.'
Mr Chan works for Receivables Management Services (HK), the Hong Kong branch of an international debt-collection agency and the professional side of an industry that is trying desperately to dissociate itself from its less-savoury counterparts.
Despite agencies that insist on operating well within the law, complaints against debt collectors are rising.
There were 11,656 cases in the first half of the year, up from 10,761 in the same period last year. Between 2003 and last year, complaints rose about 10 per cent.
Two weeks ago, the Security Bureau rejected recommendations by the Law Reform Commission to establish debt harassment as a criminal offence, set up a dedicated licensing body, and regulate the sharing of consumer credit data.
Existing laws were enough, the bureau said, to combat 'most of the undesirable debt-collection activities', citing criminal sanctions against intimidation, assault, blackmail and letters threatening murder.
The argument failed to persuade one long-time critic of the collection industry, independent legislator Albert Chan Wai-yip. He said many agencies are still resorting to unscrupulous methods.
'I am extremely disappointed with the government's decision, because the problem is very serious. It's a disturbance to the people affected, and it's a waste of police resources,' he said.
The issue boils down partly to economics. Big banks and telecoms use collectors rather than the legal system to get their money because they are cheaper - if agencies fail to collect they are not paid.
An industry association exists - the Hong Kong Credit and Collection Management Association - with a code of professional ethics, but few of the city's collection agencies belong to it.
For example, Mr Chan's employing agency is not a member. Rather, it sought to distance itself from the organisation, saying 'we have no connection'.
'We do not want [to convey] ... we are [one of] those local collection agencies collecting illegally.'
With no governing industry body, and the push for new laws to regulate activities exhausted, the industry remains guided solely by market forces. That suits Mr Chan fine. He will leave the paint throwing to the other guys. Business works best, he says, without the threats.
'If you get angry, then there's almost no chance you can collect.'