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  • Writer's pictureSreedhara Naidu


Debt collector law in Malaysia is governed by several laws and regulations that are in place to protect both debtors and creditors. These laws and regulations dictate how debt collectors can act, the methods they can use to collect debts, and the penalties they can face for breaking the law. In this article, we will explore the critical aspects of debt collector law in Malaysia.

Who is a Debt Collector?

A debt collector is a person or a company that collects outstanding debts on behalf of a creditor. Debt collectors are hired to help creditors recover debts the debtor has not paid. Banks, financial institutions, or other businesses can hire debt collectors.

Debt collectors are regulated by the Moneylenders Act 1951, the Consumer Protection Act 1999, and the Guidelines on Conduct of Licensed Moneylenders 2019, which set out the rules and regulations for debt collection in Malaysia.

What are the Responsibilities of a Debt Collector?

Debt collectors in Malaysia are responsible for collecting outstanding debts professionally and legally. Debt collectors must comply with the guidelines set out by the Ministry of Housing and Local Government, which include the following:

  • Identifying themselves and their purpose: Debt collectors must identify themselves, the creditor, and their purpose when contacting a debtor.

  • Avoiding harassment: Debt collectors are prohibited from harassing debtors, including using obscene language, threatening violence, or contacting the debtor outside reasonable hours.

  • Privacy and Confidentiality: Debt collectors must respect the debtor's privacy and confidentiality. They cannot disclose information about the debtor's financial situation to third parties without the debtor's consent.

  • Following legal procedures: Debt collectors must follow legal procedures when collecting debts. They cannot seize property or assets without a court order.

What are the Penalties for Violating Debt Collection Laws?

Debt collectors who violate debt collection laws in Malaysia can face penalties and legal action. The penalties include fines, imprisonment, or revocation of their license.

Debt collectors who violate the guidelines set out by the Ministry of Housing and Local Government can face fines of up to RM50,000. They may also face imprisonment for up to one year or both.

Debt collectors who violate the Consumer Protection Act 1999 can face fines of up to RM500,000 or imprisonment for up to three years or both.


Debt collection is an integral part of the financial industry in Malaysia. However, debt collectors must act professionally and legally when collecting debts. The laws and regulations in Malaysia are in place to protect both debtors and creditors, and debt collectors who violate these laws can face penalties and legal action. If you are a debtor who has been harassed by a debt collector, or a creditor who needs assistance with debt collection, it is recommended that you seek legal advice.

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