Management Summary
- Purpose / Background: This circular reports the findings of the HKMA’s industry survey on complaints against Debt Collection Agents (DCAs) employed by Authorized Institutions (AIs) for the first half (H1) of 2026. It serves as a periodic performance review and regulatory reminder to maintain oversight standards.
- One-line conclusion: While no breaches of the Code of Banking Practice were reported, AIs must maintain vigilant oversight as complaint incidence per 1,000 accounts increased slightly from 0.04 to 0.05.
- Key Changes:
- Increase in the complaint incidence rate to 0.05 per 1,000 accounts (up from 0.04 in H2 2025).
- Total complaints rose to 28 (from 20 in H2 2025), involving 8 DCAs.
- Total accounts assigned to DCAs decreased to 518,181 (from 568,603).
- A slight uptick in complaints lodged by unrelated third parties (3 cases).
- Key Dates / Deadlines: N/A (Reporting period closed; ongoing compliance required).
- Applicability / Impact scope: All AIs that utilize third-party debt collection services.
- Recommended management actions:
- Conduct a gap analysis of current DCA monitoring systems to identify why complaint frequency rose despite a decrease in total assigned accounts.
- Reinforce training for DCA staff regarding the Code of Banking Practice.
- Review the effectiveness of "third-party" outreach controls to prevent improper contact with individuals unrelated to the debt.
- Enhance periodic audit frequency for the 8 DCAs identified as subjects of complaints.
Detailed Summary
- Document overview
- Nature: Regulatory circular detailing industry performance metrics for H1 2026.
- Purpose: To provide transparency on DCA performance and reiterate the requirement for AIs to exercise vigilant oversight over their outsourced debt collection activities.
- Main requirements
- AIs are mandated to maintain robust systems and procedures to monitor DCA activities.
- AIs remain responsible for the conduct of their employed agents and must ensure compliance with the Code of Banking Practice.
- Key changes
- Quantitative Trends:
- Incidence rate: 0.05 complaints per 1,000 accounts (vs 0.04 in H2 2025).
- Complaint volume: 28 total complaints involving 8 DCAs (vs 20 complaints against 8 DCAs in H2 2025).
- Account volume: 518,181 accounts assigned (a reduction from 568,603).
- Qualitative Observations: 3 complaints were received from unrelated third parties, highlighting a potential risk area in skip-tracing or collection outreach.
- Important dates & transition
- Reporting Period: 1 January 2026 to 30 June 2026.
- Ongoing compliance: Requirements remain in effect as per previous HKMA circulars and the Code of Banking Practice.
- Impact and risks
- Operational: Increased reputational risk associated with the rise in complaint incidence.
- Compliance: Need for heightened scrutiny on DCA selection and performance management.
- Data/Privacy: Third-party complaints suggest a need to review data handling during the debt collection process.
- Compliance action checklist
- [ ] Audit internal oversight logs for DCAs involved in recent complaints.
- [ ] Verify that the 28 complaints from H1 2026 have been fully investigated and remediated.
- [ ] Update DCA service level agreements (SLAs) to specifically address "unrelated third-party" contact incidents.
- [ ] Ensure all 33 AIs employing DCAs have clear reporting lines for DCA-related grievances.
- Appendices/attachments summary
- Annex (Survey on DCA complaints): Provides detailed comparative tables (H1/2024–H1/2026) covering the number of AIs using DCAs, distribution of DCA usage by volume, incidence rates, and complainant profiles. These tables confirm that while total account assignments fell, the concentration of complaints remained spread across 8 specific agencies.