China Banking Association Issues New Guidance to Regulate Consumer Loan Collections, Banning Collection Calls from 10 PM to 8 AM

The China Banking Association has recently issued the Guidelines on the Collection of Personal Consumer Loans by Financial Institutions (Trial) (the “Guidelines”). Under the new framework, financial institutions are strictly prohibited—without the debtor’s consent—from conducting telephone collections, in-person visits, or any other collection activities between 10:00 p.m. and 8:00 a.m. the following day.

The Guidelines clearly state that member institutions bear primary responsibility for collection management. This includes full oversight of both in-house collection teams and any outsourced collection agencies. External collection agencies, in turn, are required to ensure the compliance of their own operations and will bear primary responsibility for any violations of the Guidelines.

Yang Yanwen, Chief Advisor of Luzhou Bank, told National Business Daily that unregulated outsourced collection practices in the banking sector can easily trigger market disorder and associated risks. The core objective of the new Guidelines, he explained, is to curb abusive practices in consumer loan collections and promote greater standardization and professionalism in post-loan management.

The Guidelines explicitly prohibit the use of intimidation, insults, deception, threats, or any other improper methods in debt collection. Member institutions must conduct all collection activities strictly within the behavioral framework set out in the Guidelines, safeguarding the lawful rights and interests of debtors while firmly rejecting illegal or violent collection practices.

At the same time, the Guidelines affirm that collection is a legitimate means for member institutions to protect creditor rights after a borrower defaults. Lawful collection rights and compliant methods are protected by law, including recovery efforts carried out by in-house teams, authorized external agencies, or through judicial channels.

Member institutions are required to fully assume their role as the primary party responsible for collection management and to exercise heightened prudence when engaging external collection agencies. Prior to cooperation, institutions must conduct rigorous compliance reviews and strengthen collaboration in areas such as staff compliance training and consumer rights protection. A formal roster-based management system should be implemented, alongside clear and continuously updated policies covering information management, professional training, legal liability, and financial accountability. For any single debt during the same period, only one collection agency may be appointed. Institutions must also publicly disclose, through official channels such as their websites, the names and contact details of authorized collection agencies.

The Guidelines list a series of strictly prohibited behaviors for collection personnel. These include impersonating administrative or judicial authorities, unlawfully investigating debtor information, or sending misleading collection notices. External agencies may not present themselves as the member institution. It is also forbidden to disclose personal privacy, illegally obtain personal information, or employ intimidation, insults, fraud, threats, violence, or criminal means. Misleading statements, fabricated or exaggerated claims, references to fictitious blacklists or credit databases, false promises, inflated debt amounts, or exaggerated legal consequences are all prohibited. Collection notices or legal letters may not be posted in public places. Without consent, collectors may not enter private residences or office premises associated with the debtor.

Yang Yanwen reiterated that outsourcing post-loan collections is unlikely to be eliminated altogether, given the sheer volume of consumer loans handled by banks. Instead, the focus should be on strengthening oversight and regulation of outsourced collection activities. This, he noted, reflects the spirit of the Guidelines: acknowledging existing market issues while clarifying responsibilities and standardizing conduct to ensure orderly and compliant operations.

The Guidelines further emphasize that all collection activities must be fully documented. Member institutions and external agencies are required to record the entire collection process, ensuring that audio recordings, video footage, and other records are truthful, objective, and complete. The retention period for such materials must comply with relevant regulatory requirements. Where judicial collection is involved, records generated by courts, arbitration bodies, or notarial institutions will follow their respective management rules.

Telephone collection efforts must be conducted in a reasonable and necessary manner. If a debtor’s call goes unanswered, attempts to reach the same contact number should generally not exceed six times in a single day, unless otherwise agreed with the debtor.

The Guidelines also regulate contact with third parties. Third parties are categorized as either debt-related or unrelated. If a loan is used for household expenses, a spouse may be recognized as a debt-related third party, but such determinations must be made cautiously and strictly. Collection activities targeting unrelated third parties are strictly prohibited.

For on-site collection visits, at least two collection personnel must be present. Collectors must carry valid work identification or authorization documents, observe professional etiquette, and ensure that the entire visit is audio- or video-recorded. Proper attire is required, and collectors are prohibited from wearing distinctive uniforms or engaging in inappropriate conduct.