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.