Gold Partners
- HKGCC Membership No. :
- HKG0358
Gold Partners
Overseas investments driving company closer to goal of becoming world's leading Chinese credit management company
With each year that passed working for international credit card companies, Jason Lo grew increasingly frustrated by the lack of professional debt collection agencies in Hong Kong. After 10 years in the industry he'd had enough. He quit his job and established a company to fill the void.
Dressed in his tailored, navy-blue suit, immaculately groomed and equally articulated, one of the biggest challenges the 42-year-old entrepreneur has faced is dispelling the image of debt collectors as thugs who menace people behind on their repayments. Breaking the stereotype mould has been a critical component in winning key customers -- banks and credit card companies.
"It was especially difficult to get business from banks," he said, "mainly because banks had their concerns over conflicts of interest, and Gold Partners had to prove its service standard to gain their contracts."
Acutely aware of the cost of a debt collection mission turning ugly and the damage it can inflict on their name, banks traditionally employed law firms to handle debtors.
But Mr Lo believes that just as lending money is based on sound business principles, so should debt collection.
He hires talented professionals to help him run his business set in a bright, cheery office overlooking the Hong Kong Convention and Exhibition Centre on Harbour Road. He invests in continuous staff training to teach employees how to handle debtors they call. Emotional quotient training and Chinese wisdom teachings are also an important factor to help his staff deal with debtors.
"People quality is the key," Mr Lo said. "But we also need to have certain elements to ensure the quality is maintained."
Gold Partners has invested heavily in technology to fully computerised workflows. It has also installed a centralised telephone recording system to provide evidence against false accusations from debtors that they were verbally abused or threatened by debt collectors calling them.
"We care about our clients' reputation and goodwill so we need to record all conversations, even when our staff visit people we record all communications," he said.
The strategy has paid off for Gold Partners which now serves more than 100 banks and 500 listed companies in Hong Kong and Taiwan. Its services include collecting overdue credit card loans, personal and corporate bank loans, unsettled bills and overdue payments from buyers on behalf of suppliers.
Admittedly, economic hard times have propelled its growth. At the end of 1999 -- its peak year and the barb for many people snagged on the hook of the recession -- the company had US$1 billion in assignments, compared to a total of US$5 billion since its establishment in 1987.
Banks' tighter lending criteria and a return to economic growth means fewer debts will need to be collected in Hong Kong.
"In 2000, our Hong Kong business experienced a drop of 8 per cent in turnover," Mr Lo said. "However, since we have made the right steps to internationalise our operations, if we include the growth in our Taiwan section, there? still a 25 per cent increase in our turnover."
Gold Partners' expansion overseas is bringing it closer to its goal of becoming the world's leading Chinese credit management company by 2005.
In Taiwan, it set up a Taipei office in 1996 and a Kaohsiung branch in 1999, followed by a Mainland representative office in Shenzhen last November.
While its Taiwan's services mirror those of Hong Kong, under PRC law, credit management companies cannot register their business in the Mainland.
"We have agreements with respectable law firms in major Mainland cities, including Beijing, Shanghai, Guangzhou and Shenzhen, to serve our clients from Taiwan and foreign countries by instructing our affiliated solicitors to negotiate with the debtors to resolve account receivable problems," Andy Woo, Gold Partners' regional manager for East Asia and China explained. "And if Chinese enterprises need to collect debts outside the Mainland, the account can be referred to our foreign affiliates around the world."
He expects the credit management industry will follow other financial services into the Mainland market upon China? accession to the WTO.
A more mature financial market in the Mainland will cultivate a debt collection industry, similar to the way the industry developed in the United States, Europe, Hong Kong and Taiwan, Mr Woo added.
Plans are afoot to also open offices in Malaysia, Singapore and Bangkok once its self-developed Collection Agency Management System is fully functional. The new system, costing around HK$18 million will be the heart of its operations, with all offices hooked up to the centralised system.
Clean image In 1997, the Hong Kong Monetary Authority introduced guidelines for banks using debt collection companies' services. This has helped clean up the image of debt collectors, which in general do not have a good reputation. But some agencies still use debt collection tactics which have prompted some complaints.
A consultation paper on "Regulation of Debt Collection Practices," published by the Law Reform Commission in July 2000, should lay the ground rules for all debt collection agencies to follow.
Mr Lo said he feels the most important proposal is licensing, which will put the industry on a healthy development track.
"I appreciate this move because it?l put the industry under government regulations. This means agencies that cannot not satisfy the government's criteria will be eliminated, raising the quality of the industry, increasing transparency and lowering public distrust of the industry," he said.
