Second Reading of Debt Collection Bill - Wrap-Up Speech by Ms Sun Xueling, Minister of State, Ministry of Home Affairs and Ministry of Social and Family Development

1.   Mr Speaker Sir, I thank the Members who have spoken on the Bill.

Scope of the Regulatory Regime

2.   Mr Dennis Tan asked about the state of the debt collection industry. As mentioned in my Second Reading speech, we are not able to definitively assess the number of debt collection companies and debt collectors in Singapore because currently we do not have a regulatory framework.

3.   Mr Murali Pillai asked if the Bill will regulate the collection of both secured and unsecured debts. The Bill defines debt as a monetary obligation owed by a debtor; the collection of such debts, whether secured or unsecured, will be regulated. However, the collection of non-monetary assets, including those used to secure a debt, will not be regulated for now, as such activities have been assessed to pose minimal law and order risk. Nevertheless, Police can still rely on existing legislation like the Penal Code or Protection from Harassment Act to take errant collectors of non-monetary assets to task.

Fit-and-Proper Criteria

4.   Mr Louis Chua, Ms Foo Mee Har, Mr Derrick Goh, Mr Louis Ng, Mr Leon Perera and Mr Yip Hon Weng asked about the criteria used by the Licensing Officer to assess whether an applicant is fit and proper to be granted a licence to operate a debt collection business or approval to be deployed as a debt collector. As mentioned in my Second Reading speech, the Licensing Officer will consider factors deemed relevant in assessing the applicant’s propensity to engage in problematic debt collection conduct, such as past offences involving harassment or violence as listed in the Second Schedule of the Bill. The Licensing Officer will also consider the severity of the offences, and the length of time that has passed since the commission of the offence. The considerations used to assess whether an individual is fit and proper to work as a debt collector are similar to those used for security officers. The approval to be deployed as a debt collector is not time limited. However, the approval may be revoked or suspended should the Licensing Officer assess that the debt collector no longer meets the fit-and-proper criteria. We appreciate Mr Leon Perera’s suggestion to provide opportunities for ex-offenders who may wish to join the industry. The Licensing Officer will consider their circumstances on a case by case basis.

Differentiation Between Class Licensees

5.   Mr Derrick Goh asked if there will be differentiation among the class licensees, based on their respective risk profiles. Given that class licensees are already regulated by other Government entities, they are assessed to pose lower law and order risk compared to debt collection businesses that are not currently regulated. As such, we assess that there is no need to further differentiate the class licences for now. Nevertheless, we will monitor the situation, and recalibrate the class licensing framework if the need arises.

Levers to Take Errant Debt Collection Businesses and Debt Collectors to Task

6.   Mr Murali Pillai asked if there would be rules of engagement when debts are in dispute, including dealing with instances of debt collectors collecting debts from victims whose identities have been misused by impersonators to borrow money.

7.   During my Second Reading speech, I mentioned that we will be introducing regulations to guide the conduct of debt collection businesses and their debt collectors. For example, debt collectors will be required to verify that the subject of the debt collection from whom they are attempting to collect a debt, indeed owes the debt, such as verifying the subject’s identity against the signatory to a debt contract. The Debt Collection Regulations will also prohibit debt collectors from continuing to collect debt from a debtor, if the debtor has informed the debt collection business or collector that the debt is in dispute or that the debtor has initiated a process to settle the debt through other means.The acceptable process for this will be prescribed in subsidiary legislation. This could include mediation or court proceedings. Debt collectors will also be required to ensure that that there is a proper contract detailing the terms of appointment by the creditor, the debt to be recovered, the payment schedule, and the debtor’s identity. These will minimise potential disputes between the debtor and debt collectors.

8.   I will also add that for instances of debt collectors collecting debts from victims whose identities have been misused by impersonators to borrow money, cheating by impersonation is punishable under section 419 of the Penal Code. If such cases are reported, Police will investigate the matter. However, Police do not investigate civil disputes about the debt.

9.   Mr Louis Chua asked if there will be clearer regulations prescribing unacceptable debt collection methods, and Mr Derrick Goh, Mr Dennis Tan, and Mr Yip Hon Weng asked if problematic debt collection conduct on online platforms will be prohibited under the Bill. As mentioned in my Second Reading speech, we will introduce regulations prohibiting any behaviour that threatens the physical safety of the debtor or any other third parties such as the debtor’s family members. This includes sending text or social media messages to the debtor threatening physical harm to the debtor or his or her family. Livestreaming of debt collection activities, in and of itself is not an offence unless it crosses the threshold for other criminal offences such as the Protection from Harassment Act.

10.   Mr Dennis Tan asked if we will be introducing any regulations prohibiting problematic debt collection conduct other than the ones we have announced in the public consultation paper. We currently do not have these plans.

11.   Mr Leon Perera asked whether levers under various legislation could be unified and harmonised. Today legislation such as the Penal Code and Protection from Harassment Act apply to everyone. Taking into account our observation of the debt collection activities, we are introducing additional levers that are more specific to the Debt Collection industry.

12.   Ms Foo Mee Har and Mr Yip Hon Weng asked about issuing a Code of Practice and putting in place measures to ensure compliance with the Code. Given that there will be regulations to guide the conduct of debt collection businesses and their debt collectors, we do not intend to issue a Code of Practice for now. To address Mr Leon Perera’s and Mr Yip Hon Weng’s question about how debtors may verify the legitimacy of debt collectors, we will require debt collectors to show proof of the Licensing Officer’s approval, when asked to do so.

Avenues for Public to Complain Against Errant Debt Collection Activities

13.   Mr Dennis Tan and Mr Yip Hon Weng asked about the potential avenues for members of the public to lodge complaints against errant debt collection activities. Members of the public may lodge a Police report online via the i-Witness Portal or Police’s e-services website. They may also do so in person at a Neighbourhood Police Centre or Neighbourhood Police Post. If immediate Police assistance is required, they should contact the Police at ‘999’.

14.   Mr Leon Perera and Mr Dennis Tan asked about educating the public on the regulations under the Debt Collection Bill. Information on the Debt Collection regulatory regime will be published on Police’s website. Mr Dennis Tan also asked if the Government can conduct a public education campaign. We thank the Member for the suggestion and we will study this.

Malicious/Frivolous Complaints Against Debt Collectors

15.   Mr Derrick Goh and Mr Yip Hon Weng have voiced their concerns over debtors who make malicious or frivolous complaints against debt collectors to frustrate the debt collection process, and asked if there will be safeguards against these debtors. As the Member rightly pointed out, furnishing false information to cause Police to act against debt collectors is punishable under section 182 of the Penal Code. Police will investigate and take action against the debtor if an offence is disclosed.

16.   There are also safeguards within the Bill to avoid penalising innocent debt collection businesses and debt collectors. Before regulatory action can be taken against the licensee or debt collector, the Licensing Officer must first give a written notice to the licensee or the debt collector, and provide at least 14 days after the written notice is served, for written representations to be made to the Licensing Officer with respect to the proposed regulatory action.

Remuneration Structure for Debt Collection Businesses

17.   On the questions raised by Mr Yip Hon Weng on regulating the remuneration structure for debt collection businesses, the Bill allows the Minister to make such regulations. However, we have assessed that there is no need to do so currently. Nevertheless, we will monitor the situation closely.

Training for Debt Collectors

18.   Ms Foo Mee Har suggested for the management and staff of debt collection businesses to undergo accredited training programmes covering the debt collection regulations, and for debt collectors to pass a test before they are approved by Police to be debt collectors. Mr Dennis Tan asked about training for potential debt collectors. We will require licensees to put in place measures, such as proper training, to ensure that their debt collectors understand and comply with the Debt Collection Bill and other written laws. However, the Police will not be administering tests for debt collectors.

Qualifications and Protection of Officers

19.   Mr Yip Hon Weng asked about the selection of licensing officers and Mr Louis Ng about the appointment and protection of compliance officers. Compliance officers will be suitably trained before they carry out their duties. Unlike licensing officers who are police officers, compliance officers will not be authorised to detain or arrest any individual, to search any place or individual, or to seize any property.

20.   There will be audit checks on compliance officers to ensure that they are proficient in carrying out their duties, and these safeguards are similar to other regulatory regimes under the Police’s purview.

21.   On Mr Louis Ng’s point on protecting compliance officers, they will be deemed to be a public servant for the purposes of the Penal Code and will receive the same protection as public officers when exercising powers under the Bill.

Savings and Transition

22.   Mr Dennis Tan asked about how we will assist existing players to transit into the new regulatory regime. As mentioned in my Second Reading speech, the Bill provides saving and transitional provisions to ensure that sufficient time is provided for existing debt collection businesses and debt collectors who wish to continue operating their debt collection business or acting as debt collectors to transit into the new regime.

Other Issues

23.   Mr Louis Chua, Ms Foo Mee Har, Mr Leon Perera, Mr Don Wee, and Mr Yip Hon Weng asked a few questions which are beyond the scope of the Bill, but have close nexus with debt collection. For example, whether there will be guidelines to help residents not fall prey to scams, whether the community legal clinics are sufficient for residents to seek legal advice, whether there will be measures to protect vulnerable segments of the population from excessive borrowing and making debt counselling and restructuring more widely available, as well as whether we can consider introducing a scheme for debtors to seek temporary relief from debt collection activities, similar to the Debt Respite Scheme in the UK. We will pass these feedback to the relevant agencies to study separately.

24.   On Mr Don Wee’s question regarding unlicensed moneylending syndicates that resort to depositing unsolicited amounts of money into the bank accounts of ex-borrowers, and forcing them to make payments for the unsolicited loans. There have been such cases reported since 2011. The Police will continue to monitor them closely. Members of the public who wish to take up loans should only borrow from licensed entities such as banks, financial institutions and licensed moneylenders. We also encourage members of the public to be vigilant, and exercise due care before furnishing personal particulars and banking credentials for any purposes.

Conclusion

25.   Mr Speaker Sir, I hope I have addressed the Members’ concerns. The Bill will help improve the conduct of the debt collection industry and better address disamenities that may arise from problematic debt collection conduct. Once again, I thank Members for their strong support for the Bill.

26.   Sir, I beg to move.