Move against credit card harrassment and Agony
Loan repayment harrassment
Tweet -- The recent suicide of a loanee in Delhi again threw light on the harassment meted out by recovery agents on defaulters.
Though in Chennai such cases are less, the issue of recovery agents nagging the defaulters persists.
In a bid to prevent the harassment of loan recovery agents, an organisation, Move Against Credit Collection Agony and Nuisance (MACCAN) has been formed in Chennai.
The organisation consisting of advocates, doctors, social workers and others, offers financial counselling to the defaulters and also guides them to repay the loan with the proper interest in the legal manner.
It would also helps loanees in filing cases against harassment by agents and also fights on their behalf. They also help in getting the settlement certificate from the bank after the loan is re paid.
“We will take up only the genuine cases. If the individuals file the case, the banks state that recovery agents were not on their rolls and not responsible for their action.
There are nearly 250 loan recovery agencies in Chennai alone,’’ said A J Prabhakaran, chief negotiator of Maccan.
What are the banks not allowed to do?
Well, debt recovery agents (DRA’s) are not allowed to enter a person’s home without permission. And they have to carry an identification card with them at all times. Also, RBI rules lay down that the state DRA’s can contact customers only between 7.00 a.m. and 7.00 p.m. and has to maintain civil discourse. The customer is not to be humiliated publicly or in front of his family members.
What should borrowers do?
has some good advice for those who find it difficult to pay back the money they have borrowed. They say:
1. Avoid giving post-dated cheques to banks because if a cheque bounces, it is a criminal offense and the punishment can be a two year jail term. This gives the lender an even greater leverage over the borrower.
2. As soon as you realise that you have a problem, discuss the issue with the bank, even before you default on a loan payment. Its not just the DRA’s you have to fear, but mounting interest rates. This can be particularly bad if it’s a credit card payment which is not paid on time.
3. If necessary sell off assets. If selling off the asset means you have to go into a smaller house, so be it. But remember that if you default and you have mortgaged your property, you lose even items inside your home.
4. If things go so far that the bank sends you a legal notice (after reminders have failed to elicit any response from you) then you need to talk to the bank immediately. Try and reach a settlement. If you can convince the bank that it is a temporary problem, that you are still credit-worthy and if you have a good re-payment record, your bank could agree to a compromise. They could either agree to to re-structure the installments, or settle the matter by accepting a smaller amount in a lumpsum payment.
5. If you have absolutely nothing left, and are at the end of your tether, you need to seek police protection. But keep a copy of all notices and reminders because these notices specify a period after which the bank can take action against you.
http://maccaan.com/gives some tips on how to handle threats from banks.
1. Call up the bank and complain bitterly about any harassment from DRA’s.
2. Threaten litigation if need be.
3. Go to the nearest police station and file a complaint.
4. Keep a tape recorder handy. In the tape, try to get the agent to clearly state what he wants from you, what bank he is from, his name, and his agency’s name. It is important to keep proof of all threat calls. Even better, install a camera in your home if loan recovery agents dare intrude there!
5. You can sue the bank individually, if you have the resources.
6. If you do not want to get involved personally, approach a consumer action group.
Banks have a responsibility
Banks need to be different from moneylenders of yore. Giving loans knowing full well that the party is not credit worthy is unprofessional, whether deliberate or not. Sure, banks can make a mistake, a genuine mistake. But the way many banks are running their personal loans business makes me suspect that everything isn’t above board.
In some cases, they may have given the loan to a credit-worthy person, but an unforeseen situation like a sudden health expenditure, job loss or death, or a collapse of a business could have made it difficult to pay back the loan. But in such situations, things can get sorted out, although with a lot of heartburn. In such cases, the banks and the borrowers need to hammer out a solution and this is in their own interest. Not caring whether the defaulter lives or dies is unforgivable.
What are the banks not allowed to do?
Well, debt recovery agents (DRA’s) are not allowed to enter a person’s home without permission. And they have to carry an identification card with them at all times. Also, RBI rules lay down that the state DRA’s can contact customers only between 7.00 a.m. and 7.00 p.m. and has to maintain civil discourse. The customer is not to be humiliated publicly or in front of his family members.
What should borrowers do?
has some good advice for those who find it difficult to pay back the money they have borrowed. They say:
1. Avoid giving post-dated cheques to banks because if a cheque bounces, it is a criminal offense and the punishment can be a two year jail term. This gives the lender an even greater leverage over the borrower.
2. As soon as you realise that you have a problem, discuss the issue with the bank, even before you default on a loan payment. Its not just the DRA’s you have to fear, but mounting interest rates. This can be particularly bad if it’s a credit card payment which is not paid on time.
3. If necessary sell off assets. If selling off the asset means you have to go into a smaller house, so be it. But remember that if you default and you have mortgaged your property, you lose even items inside your home.
4. If things go so far that the bank sends you a legal notice (after reminders have failed to elicit any response from you) then you need to talk to the bank immediately. Try and reach a settlement. If you can convince the bank that it is a temporary problem, that you are still credit-worthy and if you have a good re-payment record, your bank could agree to a compromise. They could either agree to to re-structure the installments, or settle the matter by accepting a smaller amount in a lumpsum payment.
5. If you have absolutely nothing left, and are at the end of your tether, you need to seek police protection. But keep a copy of all notices and reminders because these notices specify a period after which the bank can take action against you.
http://maccaan.com/gives some tips on how to handle threats from banks.
1. Call up the bank and complain bitterly about any harassment from DRA’s.
2. Threaten litigation if need be.
3. Go to the nearest police station and file a complaint.
4. Keep a tape recorder handy. In the tape, try to get the agent to clearly state what he wants from you, what bank he is from, his name, and his agency’s name. It is important to keep proof of all threat calls. Even better, install a camera in your home if loan recovery agents dare intrude there!
5. You can sue the bank individually, if you have the resources.
6. If you do not want to get involved personally, approach a consumer action group.
Banks have a responsibility
Banks need to be different from moneylenders of yore. Giving loans knowing full well that the party is not credit worthy is unprofessional, whether deliberate or not. Sure, banks can make a mistake, a genuine mistake. But the way many banks are running their personal loans business makes me suspect that everything isn’t above board.
In some cases, they may have given the loan to a credit-worthy person, but an unforeseen situation like a sudden health expenditure, job loss or death, or a collapse of a business could have made it difficult to pay back the loan. But in such situations, things can get sorted out, although with a lot of heartburn. In such cases, the banks and the borrowers need to hammer out a solution and this is in their own interest. Not caring whether the defaulter lives or dies is unforgivable.
He said that even the recovery agents could not be blamed as they were under pressure from banks and sometimes resort harsh methods of money retrieval.
However, Maccan does not take up cases of persons who avail multiple loans and credit cards with an intention of defaulting.
The organisation was started three months ago and now consists of seven active members. People seeking advise can call at Ph: 64607777.
Notes to Editor
MACCAAN is an independent organization catering to the financial needs of the people. Hence Maccaan not only offers just counseling but legal solutions to credit problems.
MACCAAN the name stands for strength and liberation. The strength to carry your burdens on our shoulders and free you from the clutches of loan related afflictions. We offer valuable and practical solutions to your problems and help maintain your self dignity, mental and physical well being. We strive to assist the vulnerable clients from their financial crises by providing appropriate legal measures to combat it.
OUR PANEL
Our experts consist of professionals from different walks of like who believe and endeavor to liberate the harassed public from the drudgery of credits. The core team consists of financial experts with more more than fifteen years of experience in the banking sector.
MACCAAN the name stands for strength and liberation. The strength to carry your burdens on our shoulders and free you from the clutches of loan related afflictions. We offer valuable and practical solutions to your problems and help maintain your self dignity, mental and physical well being. We strive to assist the vulnerable clients from their financial crises by providing appropriate legal measures to combat it.
OUR PANEL
Our experts consist of professionals from different walks of like who believe and endeavor to liberate the harassed public from the drudgery of credits. The core team consists of financial experts with more more than fifteen years of experience in the banking sector.