Excuse me are you a loan shark?

It pays to have a bad reputation - if you are a debt collector.

Being confused with illegal loan sharks by banging doors and asking loudly for the unit's occupants means debtors are more likely to pay up, said some debt collection companies.

But it is a double-edged sword.

Last week, an advisory committee set up by the Law Ministry called for guidelines on acceptable debt collection practices after noting that harassment of borrowers made up the largest category of complaints received by the Registry of Moneylenders.

According to the registry, it got 81 reports concerning debt collection practices of licensed moneylenders this year up to Oct 31, although it noted that some of these may also involve unlicensed moneylenders.

There were 124 such reports last year and 100 in 2012.

The Consumers Association of Singapore has also received about 40 complaints from clients and debtors so far this year - more than the total registered over the previous four years. Last year, eight complaints were filed.

But on the other side of the coin, clients get upset when agencies cannot recover their debts but charge them administration fees ranging between $100 and more than $10,000.

These clients can include home renovation companies, moneylending firms and ordinary people seeking to recoup personal debts.

"Basically anyone who has a debt to collect," said Ms Yvonne Ho, 23, sales manager of Singapore Debt Recovery Service.

Mr Roger Rajan, a 42-year-old former logistician who owns the JMS Rogers debt collection agency which he started 15 years ago, said it is hard to estimate the size of the industry in Singapore "because it is not regulated".

"Some open up a few months before closing down."

More than 10 agencies told The Straits Times they receive about 30 to 90 cases each month, and these can take between a day and six months to settle. About 10 per cent of cases go unresolved as debtors cannot be reached. They said they had seen an increase of about 30 per cent in business after the two casinos opened in 2010.

Unresolved cases mean the companies lose out on the commission, which can be up to 50 per cent of the debt, depending on its size and how long it has been outstanding.

But industry insiders said that some agencies make do with administrative fees, and do nothing to collect a debt or simply paste notices at a debtor's workplace or home. There are also some who fail to return the money collected to clients, shut down and sprout again under a different name.

For more gung-ho agencies, their collection methods have raised concerns. Some show up at a debtor's home late at night and cause a ruckus partly to cause embarrassment. Last month, a video posted on YouTube by debt-collecting agency DZGlobal showed its employees visiting a Buangkok flat at night, knocking on the door and asking for a debtor very loudly.

When the debtor's wife opened the door, she and the three debt collectors started shouting at each other.

Other collectors show up at workplaces. In an incident reported in the media two years ago, a secretary lost her job after collectors told her firm about the money she owed.

It is difficult to recruit collectors, as "not everyone is suitable", said Ms Ho. She looks out for "good negotiators who can be firm". After being hired, collectors typically go for on-the-job training to observe how old-timers do it, or even learn martial arts for self-defence. They earn between $1,500 and $3,000 a month, excluding commission.

Currently, there are no regulations on how collectors can go about collecting money so long as their antics are not criminal.

At least one major player wants to clean up the industry's image by setting up an association to decide on what acceptable tactics are. Mr Rajan, who is behind three other agencies including DZGlobal, said: "I hope that by having a code of conduct, the industry can clean up its image and respect us as professionals."

Lawyer Patrick Tan, who runs his own firm, is cautiously optimistic over the industry's move to regulate itself, noting that the association may "provide a platform for members of the public to redress their grievances and regulate the conduct of its members".

This article was first published on November 12, 2014.
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