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Debt Collector In Singapore: Legal Dos and Don’ts

Sep 02, 2020

Find out whether the debt collector in Singapore has flouted the law. This guide will shed light on their legal rights and your options. In an ideal world, you take a personal loan or crank up your credit card bills but pay the dues every month. Your lender is happy and so are you. But repayment isn’t always a smooth affair. When you are living from paycheque to paycheque. You prioritise a medical bill or regular expenses over dues. Default on your loan more than once. The debt collector makes an unwanted (not unwarranted) entry into your lives. Many companies outsource the job of collecting payments to debt collectors in Singapore. This includes banks and licensed moneylenders. They have to follow the code of conduct set by Credit Collection Association of Singapore (CCAS). But some of them resort to harassment and violent threats to scare people into paying up.

No Specific Law Regulating Debt Collectors in Singapore

There isn’t currently any law to control debt collection agencies. Agents have the same rights to recover money as your friend or colleague who has lent you cash.

Debt Collection Company Can Contact You Anytime, Anywhere

Everyone has some point had a bad friend who borrows money but never returns it. Remember your persistent attempts to recover the money before you wrote it off? A debt collector can do the same thing. They can visit you at work, call up your spouse or parents, or contact you on social media to talk about your unpaid dues. Is your Facebook or Instagram feed full of pics of foreign trips and expensive purchases? Debt collectors will see this as a deliberate attempt to avoid paying the money owed.
Does that mean they can intimidate you?
No way! There are laws to protect you from illegal and unreasonable acts on their part. Read up on the various options to protect yourself and your family from harassment.

Debt Collectors Cannot Cause Distress

Protection from Harassment Act doesn’t allow verbal harassment that scares an individual. This includes the use of abusive, insulting or threatening language. The gangster-style debt collector with bats and knives is a rare sight. Such bully behaviour can land them in jail. Recovery agents may use profanities to pressurise you to pay the sum due. They may threaten to harass you in other ways – splash paint on your car or door. Have they warned you of public or online shaming? They have broken the law and you can call the cops on them.

Recovery Agents Cannot Use Violence 

Some debt collectors hurl abuses, bang gates, and put up banners to homes. While these are standard scaring tactics employed by them to recover dues, the law does not allow it. If they threaten to harm you, family or your pets, they are violating the provisions of the Penal code. If recovery agents brandish a weapon, waves a fist on your face or threaten to hit you, they are crossing the line. Any abusive behaviour that makes you fear for your safety is illegal and punishable.

Collection Agents Cannot Vandalise Property

Debt collectors may be rude and aggressive, but they can’t damage or destroy your property in any way. Have they splashed paint on your door or walls, stuck stickers or posters on walls? Did they turn up at your workspace and hang collection banners? Have they damaged your car? Did one of them snatch your phone? If yes, they have committed acts of vandalism. If the court finds them guilty under the Vandalism Act, they face punishment. This includes a fine not exceeding $2000, a jail term of 3 years or less, and even caning.

Debt Collectors Cannot Seize Your Things

Are you afraid they can take away your brand-new bike or smart TV? They can pretend to have the power to repossess, but they need legal documents to do it. Singapore debt recovery law requires them to get a Writ of Seizure and Sale from the Court. In the absence of such documents, it’s only an empty threat.

Recovery Agents Cannot Stalk 

If you are being followed or watched by debt collectors, it amounts to unlawful stalking. They are not allowed to hang around your home or office. If they take pictures or videos of you, that’s illegal hounding. If the debt collector intends to harass or scare you this way they are guilty of misconduct.

Debt Collection Agents Cannot Unlawfully Assemble

Legal debt collectors in Singapore send one or two persons to collect unpaid loans. If you are surrounded by a group (5 or more) of burly men shouting obscenities, don’t be afraid. Call the police on them, as this counts as an illegal assembly. Is the gang’s intent to use force to grab your possessions or destroy things? It’s an offence under section 141 of the Penal code. They can get arrested for it. If convicted, they face a jail term of up to 2 years, a fine or both under section 143. In 2015, seven debt collectors harassed an owner at Funan Digitalife Mall. Three debt collectors from that group of seven were jailed for unlawful assembly.

Debt Collection Company Cannot Mimic Government Agencies

Recovery agents are not allowed to impersonate police officers or tax agents. They cannot use fake Government letterheads. They shouldn’t be mimicking government websites to coerce debtors into paying. Report such agents to relevant authorities and get a Protection Order.
While they can’t force you to pay up money owed, they can help you negotiate a workable instalment plan.

Recovery Agents Can Discuss Repayment Plans 

Facing problems in repaying what you borrowed? Work with the debt collector instead to get a workable instalment plan or a lower interest rate. To recover the money, lenders have given debt collection companies autonomy to negotiate. They can offer repayment solutions to genuine borrowers. You can suggest an instalment plan. The agent acts as an intermediary and passes it on to the lender for approval.

Fight Back When They Cross the Line

If the debt collector has behaved unlawfully, don’t take it lying down. Seek police help to restrain them. Not sure whether the recovery agent’s conduct is an offence? Confirm this with the police. Get an Expedited Protection Order if they are badgering you. If the collection agency is a member of CCAS, you can use their dispute resolution process. Debt collectors in Singapore are not the villains here but doing their job. Don’t run away from them. But when recovery agents overstep their limits, don’t hesitate to seek legal action. Avoid dealing with unscrupulous agents. Get a loan from banks or registered moneylenders.

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