10 Facts You May Not Know About Debt Collection

Theoretically, there is a code of conduct for the debt collectors in Singapore set by the association of Credit Collectors but most of the debt collectors behave like pirates of 19th century. This code of conduct is rarely followed by them as this code of conduct does not bind them like a real law. After reviewing the risks and pros and cons of the illegal behavior of the debt collectors Singaporeans have recently raised the demand to create a law to control the debt collectors but nothing has been done in this direction so far by the government of Singapore. So, until the government passes a law you should know certain things you may not know about debt collection. They can do certain things that are not expected from them like:

1. Statute of Limitations to loans from family and friends: First of all you should know that lending a loan to family and friends on a mutually agreed rate of interest, without obtaining a money lender’s license, is legal unless it is lend to a business. But, according to the Statute of limitations, there must be an IOU or written agreement. The debtor should start a legal process to claim the repayment of his money within six years of the date of repayment determined earlier. But you may not be liable to make any repayment if there is no history of statute of limitation or any IOU. You need not worry about the things told by the debt collector.

2. Debt collector can communicate with family and friends: Normally a debt collector can legally do anything which a family or friend can do, if you owe him money. They can drop you near your office, call on your house to ask to speak to you, ask you about your location or stalk your FaceBook account. In other words, a debt collector can talk to anyone who picks up the phone, whether by your children or wife or anyone else, about the money owed to him by you.

3. Debt collectors can help in negotiating and mediating the repayment plans of the loan: Commonly debt collectors are considered as the group of gangsters with bats in their hand but actually it seldom happens, mainly if they are legal debt collectors. But due to the protection provided by Harassment act to the borrowers most of the debt collectors do not behave like gangsters as they may have to go to jail for their illegal behavior.

Today most of the debt collectors behave like a forceful and very confident employee of a bank instead of a gangster. Actually most of them have power to be a bit flexible. For instance, while negotiating with the borrower on a proposed plan of repayment of the loan, they may take the proposal to their employer to take final decision. Similarly they can also be empowered to discuss various solutions for the repayment of the loan. According to the Code of Conduct for debt collectors, they can accept the plan of repayment of loan provided by the borrower, if he can justify that he cannot repay full amount of loan due to lack of funds.

4. Debt collector cannot gather groups of more than 5 people while demanding repayment: It can be illegal for the debt collector, if he brings a crowd of more than five people to impede your business or shouting obscene words. If such situation occurs then you have the right to call the police to arrest the law offenders.

5. Debt collectors cannot raise alarm, induce harassment and distress you: The Protection from Harassment Act talks about such things in detail. If the debt collector harasses you verbally then he can be considered as distressing you. For instance, if a debt collector passes distressing remarks on you or threatens to harm your pet, then they can be convicted as law breaking professionals. Other things prohibited for debt collectors under this act may include:

Hanging around near your home, distributing your images illegally, or following you while returning home from work are unlawful acts. Hurting you by showing a weapon or threatening you for physical harm also comes under the head of illegal activities. The acts of vandalism like knocking down your phone by snatching it from your hand or defacing your property by spray painting notices on its walls are covered under this act

6. Debt collectors cannot behave like the employees of government institutions: If a debt collector show to an agent of government department like police officer or tax agent, then it will be illegal. Along with it, they are also not allowed to use fake letterheads of the government or the websites that look like the websites of certain government agencies. If a debt collector pursues to pay back loan through the messages or letters that look like official letters then you should contact with related authorities to check the authenticity of the letter or message.

7. If a debt collector goes beyond his limitations: You can file a report with local police if a debt collector goes beyond his limit while asking to repay loan. If you have enough proof for harassing you then you can also file for a Protection order against him. You should keep in mind that the rights of a debt collector are equivalent to any other person who has lent you some money.

8. You can ask them to stop calling: If the debt collector is calling you repeatedly then, as per FDCPA or Fair Debt Collection Practices Act, you can write a letter to the lender to stop making calls. However it may not forgive you from repayment of loan.

9. it is illegal to make too much calls: According to FDCPA, the debt collector is restricted to call you between 8am and 9 pm for few times instead of several times at home or office. He is not allowed to use obscene language on phone calls.

10. You can avoid moneylenders in general: Instead of contacting moneylenders you should contact reputable financial institutions and banks whenever you need some personal loan. You should avoid even licensed moneylenders as they not only charge higher interest rates but also hire debt collectors to collect their money.