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Local bank fined NT$2m for improper collection of debt

The Financial Supervisory Commission announced yesterday that it had fined Hsinchu International Bank (新竹國際商銀) for acting improperly in collecting debts, making it the nation's first commercial lender to be punished for such an offense.

Hsinchu International Bank received a fine of NT$2 million (US$62,559).

"Debtors can collect evidence, for example by recording phone calls, and report irregularities to the banking authority. The commission will impose severe punishment on banks that are found to have violated the regulations," commission spokesman Lin Chung-cheng (林忠正) told a press conference yesterday.

The commission has instituted probes into several lenders reported to have acted with similar impropriety, Lin said. He declined to elaborate on exactly how many lenders are under investigation, citing confidentiality amid ongoing administrative investigations.

In the case of Hsinchu International Bank, a debt collecting company employed by the bank was found to be using improper measures to scare borrowers into paying their debts. Specifically, the company was found to be making continuous phone calls day and night to a debtor to expedite his repayment. The commission found that this had seriously affected the debtor's work and life.

Given that banks are required to be responsible for the actions of their debt-collecting agents, the regulator said it had penalized the Hsinchu International Bank for its failure to oversee the debt-collection company's actions.

The non-profit Alliance for Fairness and Justice said last week that the top three worst banks in terms of debt collection were Taishin International Bank (台新銀行), Chinatrust Commercial Bank (中國信託商銀) and Citibank Taiwan, citing a survey that polled over 1,200 credit and cash card debtors.

These three lenders are also the leading credit card issuers.

The worst offenses included harassing debtors' families, harassing debtors in the workplace and making verbal insults.
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