Debt collection firm owner sends fake demand letters, gets jail and $80,000 fine

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Ironically, the debt collector has become the one to pay up now. Tan Kian Tiong, 52, owner of a debt collection company was sentenced to 30-week jail time and $80,000 fines for sending letters of demand to debtors while falsely signing as the “legal consultant” of the firm.

Tan, the sole proprietor of Double Ace Associates (DAA), has pleaded guilty to 60 charges, including 40 breaches of the Legal Profession Act and 20 breaches of the Limited Liability Partnerships Act (LLPA) in November last year. Other considerations taken into for the sentence were other 1,083 similar charges under both acts.

Photo: Screengrab from Facebook/Double Ace Associates Pte Ltd

DAA has been operating for 20 years, collecting debts on behalf of clients. The company would take a 30 percent commission on successful debts collected, plus service fee and incurred expenses.

Between October 2013 to September 2015, DAA sent 387 demand letters to debtors, using a template downloaded from the Internet edited to look like it comes from a legal firm. This has become the standard format for all letters of demand issued by DAA.

The demand letters obliged the debtors to make full payment within seven days to avoid legal action being taken by DAA’s clients.

According to the prosecution, the letterheads contained the phrase “Debt management and legal consultants” under the words “Double Ace Associates LLP”. The term “consultants” implied that either Tan or DAA was qualified and authorised to act as an advocate or solicitor.

The acronym “LLP”, which stands for Limited Liability Partnership, also gave the false impression that DAA was registered under the LLPA.

Tan’s false representation was discovered when one of the letters’ recipients, a 56-year-old woman, referred it to his lawyer for legal advice. The lawyer then filed a complaint to the Law Society, which then referred the matter to the Attorney-General’s Chambers.

A second complaint by another recipient was also received, which led the Commercial Affairs Department to investigate DAA.

Deputy Public Prosecutor (DPP) Teo Guan Siew said, “Tan’s intent was clear, he was illicitly using the threat of legal action as a means to compel these debtors to pay up.”

“The protection of the public from such false and misleading claims to legal services demands a stiff sentence…A strong deterrent message must be sent to ensure public confidence in the legal profession and safeguard the integrity of the regulatory regime under the LPA (Legal Profession Act),” the DPP added.

The prosecution wanted the public to be able to distinguish between genuine lawyers and persons who are simply masquerading as one. He further stated: “Otherwise, members of the public may easily be duped into believing that a person is a qualified person, to their detriment.”

Photo: Screengrab from Facebook/Double Ace Associates Pte Ltd

Confidence in the legal profession and rule of law will suffer if this is the case.

From the defence side, Tan’s lawyer Lee Wei Lang argued that his client had no intention of deceiving the letters’ recipients. In fact, DAA would hand its cases over to genuine lawyers for further action relating to debtors who did not pay up.

He had been unaware that he was in contravention of the law when he used the templates, according to Lee.

Lee also added that the heavy sentence pronounced to Tan, a first time offender, would gravely affect his family’s financial needs, as he is the sole breadwinner of the family.

District Judge (DJ) Kenneth Yap maintained that Tan’s actions could have applied pressure on the debtors.

“The actions of the accused have also impugned the integrity and efficacy of the legal profession as a whole,” Judge Yap said.

“A member of the public should be entitled to rely on an assertion that an advocate and solicitor has the requisite qualifications to practice, which in turn carries the assurance that he or she would act in accordance with the ethical and legal duties that apply to the profession.”

Tan will be appealing against the sentence. He is currently out on $30,000 bail.