You know the business of lending is risky. Either you recover the money or you don’t. Many businesses, especially credit card issuers, personal loan, payday loan providers, and licensed money lenders lose a lot of money every year in debts that are not recovered. These situations put businesses in a tough spot as it is not feasible for them to call/visit each and every client to recover the debt. That’s where debt collectors come into the picture.
So, whenever a debtor refuses to pay the money, the creditor has two options: either they make efforts to recover the money on their own or they hire professionals to do it. It’s the second option that most lenders and businesses consider as an efficient way of recovering the money and the professionals who do this job are known as debt collectors. So, the next time you get a call regarding your long overdue credit card bill, it may be someone from the debt collection agency that your lender has hired to recover such dues.
The Credit Collection Association of Singapore (CCAS) was established in 2013 as a way of representing Singapore’s credit collection industry. This association was formed to ensure that the legal and regulatory standards of credit collection is followed in the city-state. CCAS aims to develop its members with the best practices of such collection through training and certification courses under its Code of Practice.
Are you someone who is dealing with a debt collector in relation to a debt? It’s important to know what these agencies are or are not allowed to do, so you can exercise your rights and figure out the best way to deal with the situation.
As per the CCAS’ code of conduct and practice, debt collectors can make contact only at reasonable times and intervals. It also requires them to consider your preferred way of communication and time. Additionally, you have the right to communicate in a language that you prefer.
Debt collectors cannot use any sensitive information obtained from you without your explicit consent. So if an agency has used your data or shared it with any third party without your permission, you can raise your concern with the authorities.
Would you allow someone to force you into some kind of contract or agreement? No, right. The same way you should not give in to the unlawful pressure put on you by a debt collector. Any action or use of words that is making you uncomfortable, or if you are feeling threatened by them in any way, you can file a case of harassment against the concerned agency. Also, when you file a complaint, these collection agencies are required to put a stop to the recovery activity until the investigation is over.
Illegal Assembly of Collection Agents
If such debt collectors come in a group of more than five people, it counts as an illegal assembly. So the next time you see many agents coming together and demanding the money that you owe, you need not feel threatened; just call the police.
Negotiation of Your Loan Terms
CCAS’ code of conduct encourages debt collectors to consider your financial position while demanding repayment. So, if you can prove that you really are going through a financially tough phase, you can negotiate a deal with the collection agent that doesn’t put too much stress on you. For instance, you could request the agent to accept a token offer or you could request them to reduce or stop your interest charges that continues to add to your account.
Recovery Activity Ceases If There’s a Dispute
In case you have filed a complaint against a debt collector for any kind of illegal activity or if there’s a dispute over the facts related to the loan, the code of conduct requires the concerned agency to stop the recovery activity until the matter is resolved. Also, in such cases, it’s important that you communicate with the agency only in writing, so that you have proof that there was a violation of your rights.
Taking Possession of Your Belongings
If a debt collector is threatening to take possession of your personal belongings, you need not worry. Because they are not authorised to take away any of your personal belongings unless they have a written order from the court for the same. So if you ever happen to be in such a situation, ask for the court’s order.
Practically, the best way out is to figure out an arrangement with the collector to pay the dues. The sooner you pay your dues, the better. You can dispute many things and delay the process, but you cannot escape the payment if you are legally indebted. CCAS has outlined certain best practices for negotiation of the terms of the repayment. At the same time, you should not let any collector threaten you illegally. So, if you have a complaint, you can report to CCAS, provided the concerned collection agency is a member of the association. In case there’s an emergency situation where you are being harassed, you should call the police immediately. You can even appeal to the court for a Protection Order.