Recovery agents can be high-handed and behave illegally. Apart from humiliation, some have even faced physical threats and intimidation.
There are guidelines for banks on how to use recovery agents. But it’s in your interest to clear all dues
The media seems to have been taken over by reports about the high-handed and illegal behaviour of recovery agents. Apart from humiliation, some have even faced physical threats and intimidation.
Collection of dues has become big business and many collection agencies have a countrywide network.
Since this business is unregulated, many agencies have very low standards and almost no staff-screening procedures. The few professionally-run ones are more are an exception.
Despite the guidelines by the Indian Banks’ Association (IBA) and the Reserve Bank of India (RBI), banks still continue to appoint recovery agents and tolerate the extra legal process followed by collection agencies till a shocking incident takes place.
What can you do as a consumer?
.Do not ignore a dispute with the bank. Stories about consumers not paying up (unjustified) fees on their credit cards are quite common. The consumer hopes that it is the end of the matter.
However, over a period of time, these dues (along with penal interest, late payment charges, etc.) pile up to a neat sum and that’s when recovery agents get into the picture.
So, as soon as you get into a dispute, complain to the bank and get acknowledgement.
Do not make telephonic complaints to call centres unless they give you a reference number. You can also file a complaint on the bank’s website. If the bank does not respond within 2-3 weeks, you should complaint with the banking ombudsman appointed by the RBI.
Details of the banking ombudsman in your area are available on the RBI’s website (www.bankingombudsman.rbi.org.in). These issues will get resolved at the very mention of the ombudsman.
.If you are genuinely in default, try and talk with the bank. If you can make some payment or provide some additional security, the bank might reschedule payments for a short period.
Remember, your default will be reported to the credit bureau and you will find it difficult, if not impossible, to get another loan in future. So, it is in your interest to resolve the issue.
In both the situations, the recovery agents cannot indulge in any strong- arm tactics. In fact, the IBA has laid down
the following guidelines for recovery proceedings:
.The customer should be contacted at the place of his/her choice or at his/ her residence or even at the place of business/occupation between 7 am and 7 pm.
Bank representatives should avoid inappropriate occasions such as bereavement in the family while making calls/visits to collect dues.
.The bank should ensure all written and verbal communication with its borrowers in simple language and should adopt civil manners for interaction with borrowers.
.Written communications, telephonic reminders or visits by the bank’s representatives (including recovery agents) can be used as follow-up measures.
The bank will give a written notice about any legal or other recovery measures including repossession of the security.
.The bank should be willing to consider handing over the property to the borrower any time after repossession and before concluding sale transaction of the property, provided the bank dues are cleared in full.
If recovery agents do not stick to the above procedure, you can follow the process below:
.If you receive abusive/threatening calls, record the call, making sure that the caller gives details like the bank he represents etc.
.Complain to the bank with a full transcript of the call. If recovery agents harass you physically, then describe each and every detail in writing. Witnesses, apart from family, can also be quoted in the complaint.
.If the bank does not take any action within a month of the complaint, or rejects the complaint, or you are not satisfied with the action taken by the bank, file a complaint with the banking ombudsman.
.You should also file a police complaint, along with the complaint filed with the ombudsman.
One interesting thing is to find out why things have reached such a pass that the otherwise respected and responsible corporate banks have to appoint recovery agents ?
Before we get into it, I want to make one thing clear. I am no apologist for banks (though I worked for one a long time ago) but their side of the story deserves to be heard as well.
It is clearly unfashionable to champion the cause of mighty corporate giants against the consumer (the classic story of David versus Goliath is completely reversed here). At the risk of being unfashionable, let me point out a few facts that tend to be glossed over:
.Banks use recovery agents when you fail to pay your dues on time
What you borrow is the money that belongs to the depositors. Hence, when the borrower defaults, depositors suffer. And if the bank is trying to recover borrowed money, it is only protecting its depositors.
If overdues pile up, it is the depositors that will suffer.
.Responsibility is a two-way street
So, while banks should act within law when collecting dues, consumers have to play their part and pay installments on time.
The author is the CEO of www.apnaloan.com, and can be reached at ceo@apnaloan.com
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