After petitions being signed to coerce the Singaporean government to save the face of debtors from creditors who had gone too far to get repayment, a question was posed in parliament and a response given by honorable K Shanmugam, Minister for Law. The question sought to know whether there is a restriction as far as the tactics used by licensed creditors to seek for debt repayments.
Citizens were keen to know how they can get help and where they can report unfair debt collection acts and practices. The minister responded by stating that reasonable measures can be taken by a licensed money lender as long as they don’t infringe the law. A step such as approaching a debtor at their place of work with the intent of causing embarrassment doesn’t constitute an offence. However, vandalism, harassment, threats and violence are illegal and constitutes to legal action. In case a debt collector goes beyond limits, you should report to the police for investigations to be carried out.
But before you think of reporting to the police, below are some important things you need to have a grasp on.
Who are debt collectors?
Lending companies can end up losing lots of money to creditors. It is thus in the best of such money lending companies to invest in methods that can claw their money back to them. This is why in most cases; the debt retrieval process becomes so unpleasant to the point where outsourced debt collection organizations are used.
What Can Debt Collection Agencies Do?
There exists a Code of Ethics in the debt collection industry that restricts the collectors from harassing the debtors to a given limit. The debtors don’t go around sticking those pigs’ heads on your doors because of this code. However, this does not mean that they never employ scare tactics at all. Debtor collectors use scare and stressing tactics such as banging on doors and windows together with hanging banners to expose you to the world as a debtor.
The Code of Ethics that was drafted by the Singaporean Credit Collection Association can come to your rescue. The CCAS resolves disputes between collection agencies and debtors. Unfortunately, the body doesn’t have enough claws to enforce this code.
What Can’t the Collectors Do?
It is quite unfortunate to debtors that no specific law exists to regulate debt collection bodies. This implies that the collectors are basically allowed to do almost anything to ensure they get the creditor’s money back as long as it is within the legitimate sphere. The only solace is that there are general laws that govern how any citizen relates with the other and the collectors are not an exception. It is thus necessary for you to scrutinize the actions such agencies employ on you to ensure they don’t do anything illegal. Below are some of the actions to watch out for as they can potentially land the collector in trouble.
· Unlawful Assembly:
In case a debt collector becomes too couth to the extent that they send a mob to you or your premises, calling a police will be a wise step for you since there will be a strong case on unlawful assembly opened on the collector. This is not only an unfair debt collection practice but also an illegal act. Any assembly of at least five people can be convicted if there is proof that they either committed crime or had an objective to do so. Such crime may include vandalism, putting you under tension and the threat to physical harm as well as forceful taking of property.
· Intimidation and/or Violence:
Whereas it is a common trait for debt collectors to shout vulgar words as they bang on doors and windows, this is not in tandem with the law. Threats and abusive or insulting language or a behaviour that is aimed at causing alarm to someone or an act that makes the culprit believe that there is an imminent immediate unlawful violence to be used on them or another person is contrary to the law of the land. If a collector thus waves a fist in your face or acts/threatens to punch you, don’t hesitate to call the police.
· Damaging/Taking your Belongings:
Most debt collectors threaten the debtors making the latter to believe that the debtors can tow their car away or even seize some of their most treasured property if they are not paid back the debt. In reality, if they are not accompanied with a legal document (writ of seizure & sale) that is given by courts of law, they are not allowed to seize your property. In case they do, call the police for investigations to be carried out.
Probably you all understand all that happened to Michael Fay. In case a debt collector affixes posters on any of your property, or affixes banners & advertisements, steal damage, destroy, or spray paint your assets, then they are guilty of vandalism thus don’t hesitate to call the law enforcement officers.
Alarm, distress and any form of harassment caused by a debt collector in the form of threats, insults, abuses or such like behaviours can amount to harassment. Under such circumstances that you feel threatened that violence can be provoked, you have a very good reason to give the cops a call.
The Best Way of Dealing with Debt Collectors
One mistake that many debtors always do is to believe that they can run away. They don’t always consider the fact that even if they run away, they can never hide. Rather than dodging till you debts escalate to higher levels when the creditor will be allowed by a court of law to seize and sell your property, engage the debt collectors in a negotiation on how best you can settle the debt. You never know, maybe your interest rates can be revised in your favor if you cooperate.
The best that the police can do is to ensure that the debt collectors don’t go outside the general law in collection of their money. It should be noted to you that there is a very weak law that governs how debt collectors can handle you thus the best thing you should always do is to collaborate with the collectors whenever possible other than rushing to the police. But when collaboration is working against you and you feel the unfair debt collection acts are becoming too much, move a notch higher.