The Ministry of Home Affairs (MHA) is seeking public input on proposed regulations for debt collection in Singapore.
MHA stated in a consultation document on Wednesday that, over the past several years, a large number of police reports had been filed against debt collection businesses and their employees for conducting debt collection in a manner that caused concern and irritation to members of the public (Jun 15).
According to data given by the ministry, the overall number of police reports increased from 134 in 2015 to 590 in 2018, reaching a peak in 2018.
In 2019 and 2020, the number of complaints decreased, before increasing to 272 last year.
MHA acknowledged that debt collecting is a "legal practice that aids the satisfaction of financial commitments."
"However, given the growing concerns, it may be necessary to implement upstream regulatory interventions on the industry in order to better manage the negative effects of such actions," the report continued.
MHA stated that the measures seek to guarantee that only firms and individuals deemed acceptable by the police can engage in debt collecting and to establish parameters for how such operations are handled.
The ministry stated, "Our guiding philosophy is to adjust regulatory requirements depending on the likelihood of organizations or people participating in problematic debt collecting activities."
MHA suggests defining debt collection activity as any action performed to collect or seek to recover a debt.
In the enforcement of a debt, serving or trying to serve any legal process or letter of demand on a person is excluded from the term.
The term include both physical and non-physical acts, such as visiting the debtor's place of employment and calling the debtor, and is "broadly construed to prevent errant debt collectors from circumventing the restrictions," according to MHA.
The government also intends to implement a licensing system for debt collection agencies and an approval system for its debt collectors.
MHA also suggests class licensing for organizations that are not mainly engaged in debt collecting but engage in such operations to recover debts for their enterprises.
According to the ministry, under a framework for class licensing, these enterprises and their personnel do not need to apply for licenses or clearance from the police.
According to a second ministry suggestion, rules for debt collection operations by licensees and class-licensed organizations and their employees might be enacted to establish appropriate conduct when collecting debt.
From June 15 through June 29, members of the public who desire to submit input can do so using this website. The complete consultation document is also accessible online.
Minister of State for Home Affairs Desmond Tan said in March that the MHA will implement a new regulatory framework for debt collection. This will entail a new licensing system and the imposition of limitations on what debt collectors can and cannot do.
He was replying to a question on how the government can combat public disturbance caused by improper debt collection.
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