IF the mere mention of debt collectors is enough to send cold sweat trickling down your chest, take heart: the Hong Kong Monetary Authority has issued new guidelines designed to keep collection agents on a shorter leash.
Two chapters of a new code of banking practice were published earlier this month in response to complaints that debt collectors hired by banks and other financial institutions were using intimidating tactics. The full code is due out by the end of the year.
The changes state that referees who are not also guarantors have no legal obligation to repay liabilities run up by deadbeat bank customers. In addition, financial institutions are now required to ask customers to obtain consent before providing referees' names.
Finally, banks and others who hire collection agents are required to keep tabs on the performance of their collection agencies and respond promptly to complaints.
The guidelines were hailed by the Consumer Council, which called for stiffer rules last spring. 'We welcome what's now being done by the Hong Kong Monetary Authority to monitor the situation,' said council information officer Kenneth So.
Newspaper advertisements announcing the guidelines sparked a surge of calls to the authority's complaints hotline, set up in April after it was revealed that a debt-collection agency hired by Standard Chartered Bank harassed the wrong man for a $78,000 debt.
From April until August 6, the hotline had received 143 complaints against unethical debt collectors.
