She added that debt collection is a “legitimate economic activity that facilitates the fulfillment of financial obligations”, but that individuals and businesses should not be subjected to methods of debt collection that “clearly exceed what may be considered reasonable pressure for payment”.
Especially if these methods also affect the public’s sense of safety, she added.
The bill aims to regulate the debt collection industry and prevent problematic debt collection behavior by setting “entry standards” in the industry and imposing licensing requirements on debt collection companies and collection agents.
For example, under the licensing regime, a company must apply for and obtain a license to engage in debt collection activities.
A person who is deployed as a debt collector must apply jointly with their debt collection company and must obtain approval before they can engage in any debt collection activity.
The bill also aims to reduce problematic behavior in debt collection by putting in place “appropriate levers” to take debt collectors and errant debt collectors to task.
For example, the new laws will require debt collectors to verify that the person they are trying to collect a debt from is the debtor, and will prohibit any debt collection conduct that threatens the physical safety of the debtor or any other third party. such as the debtor’s family members.
Debt collection companies that operate without a license could face a fine of up to S$20,000 or imprisonment for up to two years, or both.
Individuals who act as debt collectors for debt collection companies without authorization may be fined not to exceed S$10,000 or up to 12 months in jail, or both.
At least six Members of Parliament (MPs) have asked what criteria would be used to determine whether a debt collection firm is “fit and proper” to obtain a licence.
Ms. Sun said factors deemed relevant in assessing the plaintiff’s propensity to engage in problematic debt collection conduct include past offenses involving harassment or violence, as well as the seriousness of those offenses and the length of time that ss. elapsed since they were committed.
Sengkang Group (RCMP) Representative Constituency MP Louis Chua asked about the requirements for determining whether individual debt collectors are suitable for the role. He added that “regulatory clarity” would be important to ensure these people were not unfairly discriminated against.
Ms Sun said the considerations used to assess whether someone is fit and suitable to work as a debt collector are similar to those used for security guards.
“Approval to be deployed as a debt collector is not time limited, however, the approval may be revoked or suspended if the licensing agent deems the debt collector no longer meets the criteria of fitness and good repute,” she said.