7 Dec 2008
In the first 10 months of this year, complaints about banks reached more than double the figure for the whole of 2007 – and that is excluding the 10,000 complaints about their sale of minibonds that lost their value when Lehman Brothers collapsed.
While the Hong Kong Monetary Authority agreed to release the figures – 1,050 up to October 31 against 469 last year – it would not say which banks were the subjects of the complaints, nor what complaints were about.
The HKMA claims it is bound by the Banking Ordinance to keep that information secret.
However, commentators question whether withholding such information is in the public interest. David Webb, a campaigner for better corporate governance, said consumers were entitled to know whether financialservices providers were being complained about regularly.
“ Information is the lifeblood of free markets, and enabling investors and depositors to make informed choices is a good thing,” Mr Webb said. “ I think the HKMA should be much more transparent about its complaints and enforcement activities.
“I see no reason why the HKMA should not publish complaint statistics on a per-institution basis.”
To make sure larger institutions are not unfairly over-represented, the authority could state the figures as a percentage of a bank’s unique account holders.
Mr Webb noted that the Securities and Futures Commission, which regulates stockbrokers and listed companies, regularly published reports on enforcement action it has taken and complaints it has received.
“The HKMA’s traditional reason for not publicising disciplinary action has been that it might undermine confidence in the banks concerned. My response would be: ‘So what? It should’.”
An HKMA spokesman said the authority investigated all complaints to decide whether and how they could be taken further.
“Upon receipt of a written complaint, we will examine it and the written response from the bank concerned,” the spokesman said. “Our focus is on whether the bank’s complainthandling procedures are working properly.
“Should there be concerns about the bank’s handling of the complaint, we will refer the complaint to the bank for reinvestigation and a further reply to the complainant.”
If complaints related to breaches of the Banking Code of Practice, the HKMA would work with banks to address any issues, the spokesman said.
“ The HKMA has a supervisory interest in cases where a bank may have acted in a way that is improper or imprudent,” he said. “The HKMA will pursue these issues … and where necessary, require remedial action to be taken by the bank.”
But Civic Party lawmaker Ronny Tong Ka-wah, who has tabled a Legislative Council resolution asking the government to review the regulatory regime, said keeping issues between the regulator and the bank might not be in the public interest.
“ At the very least we should be able to see a breakdown of the nature of the complaints,” he said. “Otherwise, how are consumers going to know what they should be looking for and can expect in terms of service?”
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