Friday 21 November 2014

Debt collectors team up to improve image

By Laura Elizabeth Philomin, TODAY, 20 Nov 2014

With debt collectors facing a growing image problem amid reports of their unethical tactics, 10 firms from the industry have banded together to form a new association to improve their reputation.

The Credit Collection Association of Singapore (CCAS) — the industry’s first professional organisation — has developed a Code of Conduct for its members, outlining ethical conduct for firms carrying out debt-collection activities. For example, debt collectors should not use “oppressive” or “intrusive” collection methods, or pressurise debtors to raise funds by further borrowing. Instead, they should ensure all attempted contacts with debtors are made at reasonable times and at decent intervals, and respond sympathetically to their financial difficulties.

In a press release issued yesterday, the CCAS said it is committed to raising the industry’s integrity, promoting best practices and restoring the reputation of its ethical operators.

CCAS president Chen Yew Nah told TODAY that the association intends to distance itself from the unethical behaviour plaguing the industry. “We hope that the creation of this association will allow the members to be able to communicate that we are from an association that abides (by) a set code of conduct,” said Ms Chen, managing director of debt-collection agency Datapool (S).

Noting that the Moneylender’s Association of Singapore (MLAS) mainly regulates moneylending companies, Ms Chen said some of these firms also conduct their own in-house collection activities, instead of outsourcing them to debt-collection companies. As such, CCAS membership will be open to not only debt-collection firms, but also to moneylending firms, banks and debt-collection departments in companies, among others.

Membership fees are between S$250 and S$300 a year.

However, only agencies that agree to subscribe to the Code of Conduct will be admitted into the association, she said. While CCAS has yet to develop a set of punitive measures against errant agencies, those that do not adhere to the code will be expelled.

To improve the level of professionalism in the industry, CCAS also plans to offer training programmes, accreditation, certification and international collaborations. It will work with public policymakers and other industry and consumer bodies to represent the views of its members. “With low barriers to entry, it is easy for new players to enter the market. Without proper training in negotiation and dispute resolution, these companies may resort to tactics of intimidation. (This) will really help upgrade the level of competence as well as professionalism within collection activities,” said Ms Chen.

Mr Frankie Tan, managing director of debt-collection firm Double Ace Associates, said the industry could do with new guidelines on ethical behaviour, and he would consider taking up the CCAS membership.

However, reactions from moneylenders were mixed. While some said a CCAS membership was something they might explore in future, those who are already MLAS members said they did not see the point of joining another new association.

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