New law and AMCRA move to end ‘strong-arm’ debt collection

SHAH ALAM – Malaysia’s credit recovery industry has entered a new era of professionalisation with the formation of the Association of Malaysian Credit Recovery Agencies (AMCRA).

The move aims to align the sector with the stringent requirements of the newly enacted Consumer Credit Act 2025 (Act 873).

For years, the industry was hampered by fragmentation and inconsistent standards.

However, the introduction of Act 873 and the establishment of the Consumer Credit Oversight Board (CCOB) are being hailed by industry leaders as a vital "reset" to restore public confidence and eliminate unethical practices.

Under the new legislative framework, only registered and licensed agencies are permitted to operate.

Crucially, the Act explicitly outlaws aggressive tactics that have long tarnished the industry's reputation, including:

• Physical or verbal harassment and threats.
• Intimidation of debtors or their families.
• "Public shaming" through social media or other platforms.

AMCRA President Rohan Jayaratnam emphasised that the industry now recognises that clear rules are essential for long-term survival.

"The credit recovery industry is an integral part of the financial ecosystem, supporting responsible lending and national financial stability.

"We welcome the Consumer Credit Act and the CCOB as essential steps towards a more structured and transparent environment. Our objective is to ensure that ethical standards are consistently applied across the board,” he said.

AMCRA was established to serve as a bridge between licensed agencies and policymakers.

Rather than resisting the new regulations, the association intends to facilitate constructive dialogue to ensure the CCOB understands industry realities while upholding high conduct standards.

AMCRA Deputy President Datuk Mohd Shahrom stated that the framework offers an opportunity to "professionalise" a sector that employs thousands of Malaysians.

"When agencies operate within clear guidelines, it protects the consumer, supports the creditor, and strengthens the credibility of the entire industry," he said.

The association believes that by weeding out rogue operators and reducing misconduct, the wider public will eventually view credit recovery as a fair and professional service rather than a predatory one.

AMCRA will formally detail its mandate and industry commitments at an Official Launch and Media Announcement on Jan 29 in Kuala Lumpur, where key stakeholders are expected to gather to mark the milestone.