Complaints Against Debt Collection Agents Employed by Authorized Institutions

Our Ref: B1/1C B9/67C 10 September 2024 The Chief Executive All Authorized Institutions Dear Sir/Madam, Complaints Against Debt Collection Agents Employed by Authorized Institutions I write to inform you of the results of the industry survey on complaints against debt collection agents (DCAs) employed by authorized institutions (AIs) for the first half of 2024. During the reporting period, 33 AIs used the services of DCAs and assigned 436,770 accounts to 19 DCAs. A total of 28 complaints against 8 DCAs were received by 11 AIs (compared with 22 complaints against 5 DCAs received by 6 AIs in H2 2023). The average incidence of complaints per 1,000 accounts assigned was 0.06 in H1 2024 (compared with 0.05 in H2 2023). 3 complaints were lodged by unrelated third parties in H1 2024. Please see Annex for details. One instance of a breach of agency contract by a DCA was reported in H1 2024, involving disclosure of customer information of a debtor by the DCA concerned to a family member of the debtor. The AI concerned has taken punitive measures and corrective actions on the DCA concerned. I would like to take this opportunity to remind all AIs of the need to monitor the activities of their DCAs vigilantly and to establish proper systems and procedures for doing so. Yours faithfully, Alan Au Executive Director (Banking Conduct) Encl.

• 2 - c.c. The Chairperson, Hong Kong Association of Banks The Chairperson, The DTC Association Secretary, Code of Banking Practice Committee (Attn: Ms Queenie Wong – HKAB) Secretary for Financial Services and the Treasury (Attn: Mr Justin To)

Annex Survey on DCA complaints received by AIs – H1/2024 Table 1: Number of AIs using DCA services H1/2024 H2/2023 H1/2023 H2/2022 H1/2022 AIs receiving DCA complaints 11 6 4 10 10 AIs receiving no DCA complaints 22 27 28 22 23 Total 33 33 32 32 33 Table 2: Number of DCAs employed by AIs H1/2024 H2/2023 H1/2023 H2/2022 H1/2022 AIs employing 1 – 5 DCAs 31 31 30 30 31 AIs employing 6 – 10 DCAs 2 AIs employing 11 – 15 DCAs 0 Total 33 33 32 32 33 Table 3: Incidence of DCA complaints H1/2024 H2/2023 H1/2023 H2/2022 H1/2022 DCA complaints received (A) 28 22 10 19 20 Accounts assigned (B) 436,770 458,136 414,755 433,323 414,996 Incidence of complaints per 1,000 accounts (C) = (A) / (B) x 1,000 0.06 0.05 0.02 0.04 0.05 Table 4: Status of complainants H1/2024 H2/2023 H1/2023 H2/2022 H1/2022 Debtors 25 21 10 15 16 Referees 0 Family members/friends 0 1 1 Unrelated third parties 3 1 0 3 3 Total 28 22 10 19 20