PRIMER ON HOW TO HANDLE RECOVERY AGENTS

As you are aware, Debt Recovery Agents (DRAs) have no issues about coercing,
abusing, threatening and publicly humiliating people struggling to repay their debt.
Another equally troubling tactic is to barge into a person’s house early in the morning
and then sit their day after day till a person repays the debt in full.

It is thus important to be aware of your rights and remedy available. Given that
agents have a habit of breaking these rules, it is important to record all these
conversations on a mobile so that a digital record is created. We would also like you
to take the following steps as required depending on the situation you are facing with
these recovery agents.

BASIC DOs & DONTs FOR RECOVERY AGENTS

1. DRAs are not supposed to show up at any location other than the Preferred
Location already shared with the Banks.

2. DRAs are not supposed to call, communicate with any party other than the
Borrower. Only in the case where Borrower is not reachable or had unknown
whereabouts can they contact immediate relatives first then close friends.
Then failing which the DRA may (in very exceptional circumstances) try to
contact the place of employment.

3. What they are not allowed to do is:

a. Start Calling Friends, Relatives and Colleagues from the very beginning of
the recovery process. (Upon failure - Issue Notice against
Unauthorized Communication)
b. Start to propagate the situation of default and outstanding loans to such
third parties. (Upon failure - Issue Notice against Unauthorized
Communication and Defamation);
c. Or start threatening the Client, trying to extract payment, to defame,
assault, cause mental, psychological and social distress. (Send
Complaint to Nodal Officer (First to Regional then to Principal Nodal
Officer)
d. The Client needs to be educated with respect to his rights. See Primer on
Client’s Rights. Ask Clients to keep screenshots of threatening messages,
recordings of abusive phone calls and video of DRA visit.

4. There is a National Consumer Helpline Portal -

1. Banks are supposed to Notify first that your case has been assigned to the
particular recovery agency. And that following so and so agent has been
assigned.
2. Identity Card and Letter of Authority from the Bank are required to be shown
before the Collection Agent speaks with you (Click a Pic of )
3. Identity verification of the Agent from police is required to be done by the
Bank and anyone with criminal background can’t be hired
4. The Collection Agent cannot disclose your loan details to any third person
under Right to Privacy. This includes any social media violations.
5. The Agent cannot use abusive language or humiliate you in any form.

STEPS AND REMEDIES THAT ARE AVAILABLE (TO BE EXPLAINED TO

1. Banks, as principals, are responsible for the actions of their agents. Hence,
they should ensure that their agents engaged for recovery of their dues
should strictly adhere to the above guidelines and instructions, including the
BCSBI Code, while engaged in the process of recovery of dues.
2. Complaints received by Reserve Bank regarding violation of the above
guidelines and adoption of abusive practices followed by banks’ recovery
agents would be viewed seriously. Reserve Bank may consider imposing a
ban on a bank from engaging recovery agents in a particular area, either
jurisdictional or functional, for a limited period. In case of persistent breach of
above guidelines, Reserve Bank may consider extending the period of ban or
the area of ban. Similar supervisory action could be attracted when the High
Courts or the Supreme Court pass strictures or impose penalties against any
bank or its Directors/ Officers/ agents with regard to policy, practice and
procedure related to the recovery process.
3. It is expected that banks would, in the normal course ensure that their
employees also adhere to the above guidelines during the loan recovery
process.

a. On your login into the customer portal, we have provided you access to a
number of letters which you can customize and share with the police, bank,
banking ombudsman, RBI etc. Please use these letters which have been
drafted by legal experts as they can help in putting the collection machinery
on the back foot.
b. On harassment by collection agents please share with them with the letter
which confirms your participation in the loan settlement programme and its
features.
c. Inform them that Loansettlement is in touch with senior officials of the Bank
to ensure that a settlement is achieved once there is sufficient availability of
funds in the account
d. Loansettlement is also in touch with legal representatives and senior
officials at several courts, RBI etc and it is important that collection agents
remain within legal bounds
e. We have empaneled lawyers, details of whose work and specialization has
been shared on our website. This group of lawyers can be used on a
commercial basis by you as per requirement and mutually agreed fee
structure.

While debt settlement is a difficult process to go through mentally, at the same time it
is important that we handle it in a mature manner and get through it with the least
mental and financial damage.