Don’t let recovery agents get your goat

Here’s what you should know to avoid getting harassed by them
Khyati Dharamsi. Mumbai
DNA Money 3/6/2008

The menace of recovery agents continues, notwithstanding the hue and cry over the issue and the guidelines suggested by the Reserve Bank thereon.
Here’s a reckoner on what to do in case a recovery agent comes knocking on your door.

First and foremost, know that an agent is not supposed to visit you unless the bank has provided you sufficient notice, including reminders via letters or phone calls. It can resort to recovery agents only if these remain unanswered.

Also, as per guidelines issued by the RBI on recovery agents, “to ensure due notice and appropriate authorisation, banks should inform the borrower the details of recovery agency firms companies while forwarding default cases to the recovery agency.”
So, when the recovery agent visits you, he will first have to show the authority letter issued by the bank permitting him to collect dues from you. You can even ask for the agent’s identity card to cross-check the details.

The bank has to keep the borrower updated if it changes the recovery agent. “Where the recovery agency is changed by the bank during the recovery process, in addition to the bank notifying the borrower of the change, the new agent should carry the notice and the authorisation letter along with his identity card,” the RBI guidelines state.
Up-to-date details of the recovery agency firms companies engaged by banks may also be posted on the bank’s website, as per the apex bank.

The recovery agent is supposed to call on you only between 7 am and 7 pm.
As per the Code of Bank’s Commitment to Customers, which a bank is supposed to abide by, “You would be contacted ordinarily at the place of your choice and in absence of any specified place at the place of your residence, and if unavailable at the place of your business occupation.”

During all times or visits for collection of dues, decency and decorum should be maintained, the code suggests. “Inappropriate occasions such as bereavement in the family or other calamitous occasions would be avoided for making calls visits to collect dues.”

Under no circumstance can the recovery agent thrash the borrower or damage his furniture. If the customer tells the agent that he doesn’t want to speak to him, the recovery agent has to oblige.

“The bank and their agents should not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude the privacy of the debtors’ family members, referees and friends, making threatening and anonymous calls or making false and misleading representations,” states the RBI.

To ensure that you have a proof of the way the agent behaved with you, the RBI has provided the tool of documenting or recording the conversation. “Banks should ensure that there is a tape recording of the content text of the calls made by recovery agents to the customers, and vice-versa. Banks may take reasonable precaution such as intimating the customer that the conversation is being recorded,” as per the RBI guidelines on engagement of recovery agents.

These agents are also known to offer a discount in the repayment amount. One should not succumb to these tempting offers as agents are not authorised to make any verbal or written promise to a customer. They are just supposed to remind the borrower about the non-payment, say bankers.

Even if the agent offers a receipt for taking the lower amount from you, do not settle overdues with him. If you wish to settle the dues, approach the bank directly.
An SBI official told DNA Money, “The recovery agent is not allowed to compromise or manipulate with the customer in terms of money at all.”

Moreover, never hand over cash to the recovery agent. The borrower should either give a cheque to the recovery agent or go to the bank and deposit the money with the loan department directly. Read the instructions in the authorisation letter carried by the agent. This would tell you what would be acceptable and what not.

If you have a dispute with the bank on a certain amount it is claiming among its dues, inform the recovery agent about it.
“Where a grievance/ complaint has been lodged, banks should not forward cases to recovery agencies till they have finally disposed of any grievance/ complaint lodged by the concerned borrower,” says the RBI guideline.

If these norms are not followed, the RBI can impose a ban on a bank against engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period.

If your bank has been doing things against the stipulated norm on any of the points discussed above, make the same known to the RBI or the consumer forum. The banking ombudsman, too, can be approached if complaints to the bank remain unanswered.