Stricter controls proposed for debt collectors

Police show up to overlook a debt collection operation in northern Hai Phong City.-Photo nld.com.vn

The proposal was aimed at reining in third-party debt collection services, which recently have been fraught with shady agencies, business violations and problematic use of harassment tactics.

Threats of violence, forceful seizure of property, disruption of businesses and livelihoods, even alliances with criminals to kidnap and blackmail debtors, are just some of the practices that need to be stopped, the finance ministry explained.

“[These activities] have caused alarm in the community, obstructed business as well as adversely affected individual reputations and freedoms,” it said.

As per the submission for the revised decree on debt collection services, the public security ministry will have the responsibility to direct police of all levels to inspect and monitor the debt collection activities and other related activities, handle public security and order infringements, as well as issue ‘security approvals’ for law-abiding debt collection companies or withdraw approval from offending ones.

The proposal, if passed successfully, would allow police forces to employ measures deemed necessary to deter and punish wrongdoings in this line of work.

Improved professionalism

Also in the draft decree, the finance ministry has supplemented new requirements to improve the professionalism of the collection services and raise the image of a particular business line commonly perceived as quasi-criminal.

The collectors will be required to wear uniforms, employee name tags and must present to the debtor (and other concerned individuals and organisations) a referral letter from their employing company. The debt collection agencies must provide uniforms for their employees and make public the uniform designs.

Once labour contracts with the debt collectors end, the company must make sure to retrieve the tags.

Violations discovered with regards to these requirements would warrant a fine.

The requirements are supposed to “instil a sense of legal duties” into the debt collectors, which helps reduce chances of transgressions during their work, the finance ministry said.

The draft revision also asked that the directors of the debt collection companies are university degree holders (in four specific majors, namely economics, management, law, or security) and that the companies must have at least VND2 billion (US$85,750) as minimum charter capital. Vietnam Chamber of Commerce and Industry protested against both of these items and asked for them to be cut from the draft text.

These demands were already floated by the finance ministry back in 2016 but ultimately did not make it to the final approval by the Government, who deemed that only security and order items are necessary.