Is Debt Collection Legal in Singapore?

Is Debt Collection Legal in Singapore? With the growing need for money among people in Singapore, there has been an increased uptake of both personal and business loans.

Repeated delays in making payments have resulted in debt collection agencies standing up for the same for recovery. Some years back, debt collectors in Singapore could bang gates, cut off water and electricity supply for loan defaulters.

Due to these cases, there were calls to impose legislation to start regulating the debt collection process. The regulations put in place provided a good foundation on how debt collectors should conduct themselves while not misusing the debtors.

Duties of debt collection agencies

Whenever companies start losing huge sums of money as a result of loan defaulters, they end up outsourcing the services of debt collectors to help them recover back their money at a fee or commission.

Most of these companies that outsource debt collectors include financial institutions such as banks or other lending agencies.

What Singapore debt collection agencies can’t do

According to Singapore laws and regulations governing the conduct of debt collectors, it’s illegal and against the law to do the following:

1. Intimidate the debtor

The major technique that debt collectors use to pressurize defaulters to pay their debts is intimidation and threats. For instance, debt collectors may threaten you that if you fail to clear your dues they will remove your house door or even splash paint all over your place. According to Singapore’s Protection from Harassment Act, any behavior from a debt collector that brings distress to a debtor is punishable by law. The threats don’t only have to be verbal, even a gesture that causes distress is termed as a threat.

2. Inflict injury

In Singapore, a debt collector inflicting injury on a debtor is an illegal act that goes against the regulations put in place. Inflicting injury could mean beating, knocking, or even wounding a debtor. According to Singapore laws and regulations, any debt collector who intends to cause harm is liable for a $5,000, 2years jail term, or both. In case the injuries are voluntary and more severe such as dislocations, bone fractures, or disfigurations, the offender is liable for a fine and up to 10 years in jail.

3. Vandalism

Under Singapore’s Vandalism act, it’s an offense for a debt collector to vandalize a debtor. For instance, if a debt collector writes outside your house walls, places some notices, or hangs banners at your workplace, then this is vandalism and is illegal. Any debt collector who is found guilty of vandalism can get a jail term of 3years or a fine of $2,000. Apart from this being a vandalism offense, it can also fall under the category of miscellaneous offenses. In instances where there is property damage or a decrease in property value, the culprits are punished under the Penal code.

4. Unlawful assembly

Some debt collection agencies may end up sending a group of angry men to your residence or place of work to pressurize you to pay the debt. This is considered unlawful assembly especially if the group has five or more people. The group m

ight start harassing you by preventing your exit from your place or even taking some of your belongings. Upon reporting the matter to the relevant authorities, those involved can be fined, face a jail term of 2 years, or both.

5. Unlawful stalking

Debt collectors are also restricted to unlawful stalking under the Harassment act. In simple terms, unlawful stalking refers to instances where a debt collector repeatedly follows, harasses, or distresses a debtor. However, a one-off event isn’t termed as stalking.

There must be some frequent actions from a debt collector so that it can be classified as unlawful stalking. For instance, a debt collector may decide to follow you everywhere you go making you feel uncomfortable.

Also, a debt collector may repeatedly pass by at your workplace and even take some photos and videos. It even becomes more complicated when the debtor stalks you electronically using repeated messages or emails.

All these are classified as offenses that are punishable by law.

Is Debt Collection Legal in Singapore? – Conclusion

These are some illegal things that debt collectors in Singapore aren’t allowed to do. In case you find any of them happening to you, you should call the police immediately and explain to them so that you can get clarity of whether they are classified as unreasonable and illegal conduct.