Update: DBS HK staff arrested over illegal use of customer data

Singapore

SOME 20 employees of DBS Hong Kong have been arrested or hauled off for questioning by Hong Kong's anti-corruption agency for illegally using customers' personal data to sell high-interest loans via an unauthorised call centre in China.

The Independent Commission Against Corruption (ICAC) this week moved in on these employees, who had allegedly circumvented cold-calling rules, an Apple Daily report on Thursday said.

These direct-sales bankers in a team of about 100 are not allowed to cold-call customers in Hong Kong to sell high-interest loans. As a workaround, they allegedly bribed managers within the bank to get customers' data. After running the internal bribery scheme, the bankers then passed on the customer data to a call centre in China that tries to sell the loans. These loans typically have an annual interest rate of more than 10 per cent, Apple Daily said.

If a customer agrees to the loan, the DBS banker seals the deal, and passes on an effective commission to the call centre. According to Apple Daily, the final revenue was split 30-70 between direct-sales bankers and the telemarketing team.

A spokeswoman from the Monetary Authority of Singapore said: "As DBS's home regulator, we expect DBS's business practices both in Singapore and abroad to be compliant with local laws and regulations."

She said that MAS was aware of the case involving DBS Hong Kong, and that the bank was cooperating with the authorities there. BT understands that DBS had begun internal investigations after customers lodged complaints about such calls, and that DBS passed on their investigation results to the authorities.

The high turnover at the direct sales team - with each of the errant employees reportedly making sales of about HK$1 million (S$184,000) a month - proved suspicious, and according to Apple Daily, had raised eyebrows at other departments of the bank as well. DBS's internal investigation showed, among other things, that most of the calls were from a call centre in China that DBS did not authorise to market its loans. The investigations eventually led to ICAC arresting allegedly errant staff this week, BT understands.

"DBS Hong Kong takes our obligations to curtail financial crime very seriously and the bank will cooperate fully with any law enforcement agency on their investigations," a spokeswoman for the bank said.

"This includes informing authorities when we become aware of matters which require their attention. Together with our regulators and the industry, we intend to intensify our efforts in collaborating and fighting against financial crime."

BT confirmed that staff had been arrested for wrongful use of customer data.

DBS further said on Saturday there are "inaccuracies" in some news reports on the matter, based on information now known to the bank at this point. "As the case is still under investigation, we are unable to comment further. We expect that clarifications will be made in due course," said the spokeswoman.

BT also understands other banks in Hong Kong may come under investigation over similar sales tactics.

In a statement to Bloomberg, the Hong Kong Monetary Authority said it was concerned by the report, and will follow up with "the relevant bank".

Hong Kong is a key market for DBS, making up about 20 per cent of group profit.