On the Debt Collection Bill – Speech by Dennis Tan

Mr Speaker,

According to the MHA’s media release for this Bill, there has been a high number of Police reports against debt collection companies and debt collectors for carrying out debt collection activities in a manner that caused alarm and nuisance to members of the public and MHA is  instituting regulations to better manage the disamenities arising from such activities[1].  I am glad that with this Bill, more is being done to regulate the operation of debt collection businesses and the conduct of debt collectors. I support this Bill but I do wish to seek some clarifications.

Mr Speaker, it is not uncommon to hear of reports of enforcement actions by private debt collectors especially on social media and tabloids. I have also heard anecdotes of enforcement actions from my residents. Sometimes we wonder whether certain actions taken by certain debt collectors have crossed the line as far as harassment and intimidation is concerned. With this in mind, I am certainly hoping that the new proposed regime under the Bill will be effective in regulating the conduct of debt collection companies and their staff.

Activities or conduct to be disallowed in the regulations

Mr Speaker, we read in Clause 45(2) that the minister may make regulations in respect of the duties and responsibilities of debt collectors (under (f)), the duties and responsibilities of licensees (under (g), the conduct of the class licensees and their debt collectors in collecting debts (under (h)), and restricting the manner or methods by which a licensee or any of its debt collectors, collect, or attempt to collect, any debt.

I also note from MHA’s consultation paper to the proposed new regulations that there are 8 rules of dos and don’ts pertaining to debt collection enforcement and activities by both debt collector individuals and the debt collection companies included at Annex B to the consultation paper.  I presume that such rules will be listed in the subsidiary legislation and they must of course clearly stipulate what acts are allowed and what are not allowed so that proper debt collection efforts can be carried out with the personnel involved knowing what is allowed and for the debtors not being subject to harassment, intimidation or abusive or unreasonable acts.

May I seek an update or confirmation from the minister as to what other rules would be incorporated into the final regulations pertaining to conduct and acts allowed or disallowed during enforcement or collection, besides the 5 rules in the Annex which apply to individual debt collectors and the other 3 rules that apply to the debt collection companies.

May I also clarify whether the regulations expressly prohibit conduct such as making contacts with debtors at late hours or early hours of the day, or communication with neighbours or colleagues about a debtor’s debt situation without affixing of a physical notice, or pursuing debtors on social media without threatening harm or even generally the carrying out of any acts embarrassing debtors in public? Will the regulations provide debtors with a method for disputing and/or obtaining validation of debt information? These are arguably beyond what are stated in Annex B.

Next, may I ask how would the government ensure that the regulations will allow effective and reasonable debt collection methods that makes sense commercially, whilst still able to draw a line to ensure that there is no undesirable intimidation, harassment or conduct?

Public Education

I would also like to ask what are the government’s plans to educate the public and enable the public to understand the requirements of such regulations in order that as many members of the public will be able to discern for themselves what acts are allowed and what are not allowed. Public awareness will also reduce the chances of unnecessary intimidation and harassment. It may better enable the public to report meritorious cases of errant practices to the Licensing Officer so that proper action can be taken against the debt collection company and/or its staff under Part 4 of the Bill. If there are no public education plans as yet, may I urge the government to look into an appropriate public education campaign to educate the public?

Next, I would also like to ask that the government makes it clear in its rules and public education materials the contact details and procedure for referring complaints of any acts or conduct by a debt collector which falls foul of the requirements of this Act or its subsidiary legislation.

Helping the industry adjust to new regulations

I would also like to ask the minister what are the government’s plans to assist existing players to adjust to the new requirements and the new enforcement culture? Will the Government be giving them more time and if necessary, any help they need in order to fulfill the new requirements?

Important to have a good regulatory framework

Besides the conduct of debt collection activities, this Bill also serves to regulate the operation of debt collection businesses generally and sets up the regulatory framework for debt collection businesses.

Having a proper regulatory framework for all debt collection businesses is good as it should help to ensure that the industry and personnel working in it work within a clear regulatory framework. This in turn creates certainty and allow regulatory action if businesses or personnel involved fall foul of the same and we see this in Clauses 17 to 18, 22 to 28.

May I ask the SMS for an indication of what is the size (in terms of revenue, employment, and number of firms) of the debt collection industry in Singapore, both today, and say 10 years ago? Is the industry comprised of mostly small players or larger ones, and  does the government anticipate a consolidation of the industry following the new regulatory framework? Does the government collect data on how many Singaporeans are affected by legal debt collection and/or enforcement activities at any one time or in the past 2-3 years?

“Fit and proper persons”

Mr Speaker, before I end, I have some concerns regarding the eligibility of persons who can qualify to work in the industry under this Bill. I hope the definition of “fit and proper persons” has taken consideration the current make-up of the industry employees and its traditional and likely sources of recruitment. The exact eligibility criteria is not spelt out in this Bill but may be included in the subsidiary legislation. Nevertheless, I hope that it will not seek to exclude persons permanently or for long periods of time from the industry merely on account of past misdemeanours. Equally for those who are currently in the industry, instead of excluding them from future employment, could the government consider a flexible plan to engage and provide training for these employees to ensure that they will be trained and prepared for future deployment in the industry?   May I also ask the government whether there are any plans to help any of the existing businesses who may have an issue with the criteria of “fit and proper persons” during the transition period?

Mr Speaker, notwithstanding my concerns, I support the Bill.

[1] https://www.mha.gov.sg/mediaroom/press-releases/first-reading-of-debt-collection-bill/