Recovery of debts to be rehabilitated


The fact that a police license may be required to run a debt collection agency in Singapore is one of many rules under the proposed laws to regulate the activities of such agencies and decouple them from the heavy-handed tactics often employed by loan sharks who operate illegally. Debt collection is a legitimate business: overdue debts can hurt a business’ bottom line, especially for a small business. Debtors should not be allowed to behave with impunity but should be required to meet their financial obligations. However, the manner in which debt collection is carried out is extremely important. When it comes close to harassment, it should be clearly stopped.

Indeed, a large number of police reports have been filed against debt collection companies and their staff for alarming and worrying the public. There were 134 such reports in 2015. That number rose to 590 in 2018, before dropping to 272 reports last year. The problem is that there are no regulations that specifically address what debt collectors can or cannot do. This loophole allows unscrupulous agencies to act in an intimidating manner, including through speeches, writings, signs, or any visible representation. Their actions tarnish the reputation of the industry as a whole and create an association, in some minds, between the work of legitimate debt collectors and the tactics employed by illegal loan sharks to collect what is owed to them.

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