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  • 5.2 Fair Treatment of Consumers

    • 5.2.2 General Provisions for Fair Treatment of Consumers

      1. 5.2.2.1The Board of Licensed Financial Institutions, must establish a control framework that articulates and demonstrates clearly its values and culture with respect to treating the Consumer fairly and address such matters as:
        1. a.Good ethics, values and transparency in promoting and selling Financial Products and/or Services to Consumers;
        2. b.Positive Consumers relations, Complaint management and Complaint resolution;
        3. c.Assisting People of Determination;
        4. d.Equal, Fair treatment of all Consumers;
        5. e.Confidentiality and safeguarding of Consumers’ information and assets;
        6. f.Addressing conflicts of interest;
        7. g.Service performance standards that provide timely delivery of Financial Products and/or Services; and
        8. h.Identifying and addressing Errors or omissions including systemic and administrative Errors/omissions expeditiously.
      2. 5.2.2.2Licensed Financial Institutions must ensure Staff are provided with a copy of the Licensed Financial Institution’s Code of Fair Treatment of Consumers that summarizes the Licensed Financial Institution’s policy and procedures. Staff must be trained on the Code. Each year, Senior Management must send a reminder to all Staff of their responsibility to comply with the Code.
      3. 5.2.2.3The Code of Fair Treatment of Consumer should be a basis for evaluating the annual performance of Staff.
      4. 5.2.2.4Licensed Financial Institutions must monitor the performance of Staff regarding the fair treatment of Consumers by undertaking periodic mystery shopping, review of Consumer Complaints and annual Consumer satisfaction surveys.

    • 5.2.3 Conflict of Institution's Interest with Consumers

      1. 5.2.3.1Licensed Financial Institutions must have in place and operate in accordance with a written Conflict of Interest policy appropriate to the nature, scale and complexity of the Licensed Financial Activities carried out by the Licensed Financial Institution. The conflicts of interest policy must:
        1. a.Identify the circumstances which constitute or may give rise to a Conflict of Interest entailing a risk of harm done to the interests of its Consumers; and
        2. b.Specify procedures to be followed, and measures to be adopted, in order to mitigate such conflicts and to address non-compliance.
      2. 5.2.3.2Where conflicts of interest arise and cannot be reasonably avoided, Licensed Financial Institutions must:
        1. a.Disclose the general nature and/or source of the conflicts of interest to the Consumer. Licensed Financial Institutions must only undertake those businesses with or on behalf of a Consumer where that Consumer has acknowledged in Writing that the Consumer is fully aware of the Conflict of Interest and agrees to proceed; and
        2. b.In case a Conflict of Interest cannot be avoided, Licensed Financial Institutions must put in place proper disclosure and controls to mitigate them.
      3. 5.2.3.3Where Licensed Financial Institutions distribute their Financial Products and/or Services to Consumers through an Authorized Agent and pay commission based on levels of business introduced, Licensed Financial Institutions must be able to demonstrate that these arrangements:
        1. a.Are disclosed to the Consumer;
        2. b.Confirm the agent’s duty to act in the best interests of Consumers;
        3. c.Do not give rise to a Conflict of Interest between the agent and the Consumer and controls are set in place to mitigate any Conflict of Interest which may arise; and
        4. d.Provide for effective monitoring for potential/actual abusive sales and disclosure practices.
      4. 5.2.3.4Licensed Financial Institutions must ensure that there are effective controls in place between the different business lines of the Licensed Financial Institution, and between the Licensed Financial Institution and its connected parties, in relation to access and the use of personal information that could potentially give rise to a Conflict of Interest or abuse of Consumers’ Personal Data.
      5. 5.2.3.5Licensed Financial Institutions must take reasonable steps to ensure that it or any of its Staff do not offer, give, solicit or accept any gifts or rewards (monetary or otherwise) that are likely to be perceived or are a potential conflict with any duties of the recipient in relation to his /her activities involving Consumers or/and the policies of the Licensed Financial Institution.
      6. 5.2.3.6The Board of Licensed Financial Institutions must have in place adequate control framework to ensure that any Outsourcing or insourcing arrangement does not create situations of Conflict of Interest. Any Outsourcing or insourcing arrangement must be subjected to appropriate due diligence, fit and proper approvals and ongoing monitoring in order to identify and mitigate risks of any Conflict of Interest.

      • 5.2.4 Fair Treatment of Financially Distressed Consumers

        Debt Counselling

        1. 5.2.4.1Licensed Financial Institutions must provide Consumers with qualified credit counselling services on debt problems and encourage Consumers to feel confident about approaching the Licensed Financial Institutions and openly discussing their financial concerns. When approached by a Consumer, the Licensed Financial Institution must give reasonable consideration to alternative arrangements that could enable Consumers to overcome their repayment/payment difficulties.
        2. 5.2.4.2Licensed Financial Institutions must proactively provide assistance to Consumers when initial irregularities in payments are observed. Licensed Financial Institutions must encourage Consumers to reach out to them to discuss their financial difficulties.
        3. 5.2.4.3Licensed Financial Institutions must ensure their counselling Staff is qualified and adequately trained to handle Consumers facing financial difficulties and treat them with respect and empathy.

        Revised Payment Arrangements

        1. 5.2.4.4Where Licensed Financial Institutions reach an agreement on a revised repayment/payment arrangement with a Consumer, the Licensed Financial Institution must, within 10 complete business days, provide the Consumer in Writing, with a clear disclosure and explanation of the revised repayment/payment arrangement. The Licensed Financial Institution will provide the Consumer with a copy of detailed and revised payment schedule, and a breakdown of how payments will be allocated to interest/profit and the outstanding balance owing. The Licensed Financial Institution must disclose to the Consumer that reporting relating to the Consumer’s Arrears must be shared with the Credit Information Agency.
        2. 5.2.4.5Where Arrears arise on an account and a Consumer makes an offer of a revised repayment/payment arrangement that is rejected by the Licensed Financial Institution, the Licensed Financial Institution must internally document its reasons for rejecting the offer and communicate to the Consumer in Writing why the matter was rejected.
        3. 5.2.4.6Licensed Financial Institutions must make the following information available for Consumers, including on a dedicated section of its website for debt management that provides the following:
          1. a.General information to encourage a Consumer to deal with debt issues and problems of Arrears, and stating the benefits of doing so;
          2. b.Licensed Financial Institutions’ contact information for Staff that deal with debt issues and Arrears management including Staff dealing with counselling;
          3. c.Details on the Fees that may be imposed on Consumers in Arrears; and
          4. d.Self-help tools for budgeting and managing money.
        4. 5.2.4.7The information on the website must be easily accessible with a prominent link on the homepage.

      • 5.2.5 Debt Collection Practice

        General Requirements

        1. 5.2.5.1Licensed Financial Institutions must have in place written policies and procedures for managing the collection of debts owed to the Licensed Financial Institution by a Consumer. To the extent reasonably possible, Licensed Financial Institutions must discuss financial difficulties with their Consumers before proceeding with collection efforts, redemption of collaterals/guarantees and/or taking legal proceedings. Licensed Financial Institutions must document these discussions.
        2. 5.2.5.2Where an account is in Arrears, Licensed Financial Institutions must approach a Consumer, or through the Consumer’s authorized representative and discuss options that will assist the Consumer in resolving the Arrears.
        3. 5.2.5.3Where an account remains in Arrears 30 calendar days after the date on which the Arrears first arose, Licensed Financial Institutions must immediately communicate with the Consumer to establish why the Arrears have arisen. At the Consumer’s request and with the Consumer’s expressed consent, Licensed Financial Institutions must liaise with the Consumer’s authorized representative who may act on the Consumer’s behalf in relation to addressing the Arrears.
        4. 5.2.5.4Where an account remains in Arrears more than 60 calendar days after the date on which the Arrears first arose, Licensed Financial Institutions must immediately issue a notice in Writing to inform the Consumer, authorized representative and/or any guarantor of the loan/financing of the status of the account.

          The information in the notice must include the following, as may be applicable:
          1. a.The date the account fell into Arrears;
          2. b.The number and total amount of repayments/payments (including partial repayments/payments) missed (this information is not required for credit card accounts);
          3. c.The amount of the Arrears as of a specified date;
          4. d.The interest/profit rate;
          5. e.Details of any Fees in relation to the Arrears that may be applied;
          6. f.Request that the Consumer begin engaging with the Licensed Financial Institution in order to address the Arrears;
          7. g.The contact information for the responsible Person / function within the Licensed Financial Institution or where an external collection agent is assigned, the name and contact information of the authorized collection agent representing the Licensed Financial Institution;
          8. h.The consequences of continued non-payment, including:
            1. i.Where relevant, sharing of Data relating to the Consumer’s Arrears with the Credit Information Agency;
            2. ii.Any impact the non-payment may have on other accounts held by the Consumer with that Licensed Financial Institution including the potential for off-setting accounts, where it is Permissible under existing agreed terms and conditions;
            3. iii.Potential for the sale of collateral and security;
            4. iv.Demand for payment from guarantors and co-signers;
            5. v.Legal proceedings; and
            6. vi.Continued accumulation of interest charges and related fees.
          9. i.A statement that advises the Consumer to seek assistance from the Licensed Financial Institution for credit counselling and provides the contact details for the responsible Staff to provide the assistance.
        5. 5.2.5.5Where Arrears persist, the Licensed Financial Institution must send the Consumer an updated disclosure notice of Arrears regarding the state of the Arrears. The notice of Arrears is to be sent monthly confirming any payments received by the Licensed Financial Institution or its Authorized Agent and the allocation of those payments between interest/profit, principle and related Fees as well as detailing the balance of accumulated payment Arrears, Fees and interests/profits and the outstanding balance owing on the loan/financing facility.

        Communication with the Consumers

        1. 5.2.5.6Licensed Financial Institutions must ensure that the frequency and manner of contact and communications of a Licensed Financial Institution with a Consumer regarding Arrears is proportionate and not excessive. A Licensed Financial Institution must apply a fair and due process when communicating with a Consumer before seeking recourse with competent judicial authorities, while observing the following:
          1. a.A Licensed Financial Institution may communicate with a Consumer or his/her guarantor using the following approved methods:
            1. i.E-mail;
            2. ii.Registered mail;
            3. iii.Courier;
            4. iv.SMS messages;
            5. v.Phone calls; or
            6. vi.Such other method as consented to by the Consumer.
          2. b.The Licensed Financial Institution must not:
            1. i.Visit the Consumer’s place of employment or the Consumer’s home unless expressed consent is given by the Consumer or by permission of a court order;
            2. ii.Visit the Consumer outside the hours of 9 AM to 8 PM; and
            3. iii.Disclose any of the Consumer’s information to any Third Party other than a Credit Information Agency, an authorized debt collection agent, as may be legally required or where expressed consent is given by the Consumer.
          3. c.In its attempts to contact a Consumer by telephone, a Licensed Financial Institution must not make unreasonable and excessive number of communication attempts /actual communications with the Consumer. Such attempts / actual contact must only be made during the hours of 9 AM to 8 PM. Where the Consumer has not been reached, a mesasge should be left by the Licensed Financial Institution and/or authorized debt collection agent, so that the Consumer will have the ability to Call-back the same number used by the Licensed Financial Institution and/or authorized debt collection agent; and
          4. d.During any communication with Consumer the communication message must include, at minimum:
            1. i.The name of the Licensed Financial Institution and its collection department or authorized agent concerned with the collection of defaulted payments;
            2. ii.The contact number of the concerned department / agent;
            3. iii.Working hours of the concerned department; and
            4. iv.Name of the employee / agent who contacts a Consumer through a phone call.
        2. 5.2.5.7All communications with Consumers must be recorded and records maintained within Licensed Financial Institutions for 5 years after the credit amount due has been settled or the debt is written off.
        3. 5.2.5.8A Licensed Financial Institution must inform the concerned Consumer, if it has appointed a Third Party to engage with the Consumer in relation to collection of Arrears and must disclose who the Third Party is, the amount that they are to collect and explain the authority granted to the Third Party to act on behalf of the Licensed Financial Institution including the receiving of payments.

        Default on Residential Mortgage Loan/Financing

        1. 5.2.5.9In respect of residential mortgages, where a full or partial repayment/payment is missed and remains outstanding and an alternative repayment/payment arrangement has not been put in place, Licensed Financial Institutions must notify the Consumer, in Writing, of the following:
          1. a.The potential for legal proceedings for collection of payments and proceedings for repossession of the property;
          2. b.The importance of the Consumer seeking independent Advice;
          3. c.That, irrespective of how the property is repossessed and disposed of, the Consumer may remain liable for the outstanding debt after consideration of any proceeds of sale of a property and including accrued interest/profit, Fees, legal, selling and other related costs, as may be the case; and
          4. d.The costs and Fees related to default proceedings charged to the Consumer must be fair, transparent and reasonable.

        Licensed Financial Institutions must comply with the above requirements taking into consideration the characteristics of the underlying contracts for such financing.