And recalcitrant ones will try and avoid their car or home or other items from being repossessed by the FI or debt collectors appointed by the FIs.
There have been many instances where the debt collectors harass, intimidate, threaten loan defaulters, behaving like thugs and ah longs to try and get back as much as they can so that these collectors will get to laugh their way to the bank collecting their commissions. Leaving the defaulters at times traumatised or humiliated depending on the kind of treatment meted out by the debt collectors ala 'thugs.;
Each 'victim' has his or her own stories of the terror, stress, fear and most of all humiliation they receive when their bad 'record' is being aired in public by the FI goons! A fren sometime back had related how these fellos looked like they had just finished a 'cat and mouse' protest march and behaved in such an unruly manner, making threatening remarks and airing the debt he owned in front of his house gate for the neighbours to hear.
A debt collector even boast that they have their ways of getting defaulters to repay, sometimes acting as detectives to spy on the defaulters movements and then confront the defaulter of telling lies while living a luxury life at expensive eateries or entertainment centres. They even go to the defaulter's office to look for them or linger around often enough and then casually tell the guard, secretary, reception or the whole work place, so and so is in heavy debt and owe a lot of money and all kinds of character assassination and the harassment will stop if the defaulter paid the 'ransom'!
There are stories of defaulters who while getting into their car are literally pushed away, grabbed from behind during the 'car-napping' incident! Left stranded, not knowing at that time if the car had indeed been stolen or repossessed!
There was also one tactic they would come after dinner, knock at the gate and then start their verbal threats and broadcast of the debts owed, the shame the defaulter brings to the family members and all kinds of psychological and thuggery techniques to get their commission if the defaulter pays or surrenders the repossessed items.
The FIs cannot plead ignorance or claim innocence when the debt collectors resort to such high and dirty threats, verbal abuse or even physical harm to defaulters. Rightly as FIs punish customers for not reading the fine prints, the FIs should be jointly charged with the debt collection agency if the latter uses threats intimidation and criminal force on defaulters.
Just as families will blame the maid agency if the maid they provide turned out to be a problematic one or run away or can't work at all, FIs should similarly take the major blame if they do not do their homework in hiring the right debt collection agency!
It's an irony that FIs are taking great efforts and making a good show of how they are world class organisations practiciing transparency, corporate responsibility, customer centricity and offer excellent supreme customer service, they are an angel when they sell a product to you.... and a demon if you miss on your repayment. What happened to all their CSR and customer centricity?
Accepted that defaulters are no angels or saints either as they are being unfair to the FIs should they refuse and fail to service their loan. Remember, the FIs are using our savings with them to lend and they want to ensure the money don't go to 'waste' if the account turns sour and become a toxic account awaiting a 'write-off' which means the customer's money loaned to the defaulter cannot be claimed back, it is lost forever!
Defaulters seem to justify their amount should not matter to the FI since they make billions anyway. But if they know some balance sheet understanding, they will shudder how many billions have been lost, written-off, the bad loans kept for so long in the FIs' bad books! And if we add the many defaulters and their outstanding default or even one large corporation, the written off amount can buy back probably 100 new jet engines and military fighter jets for the RMAF!
One needs to be reminded how the failure of the MacDonald's counter service fello inability to service his loan, sank the world into a near depression disaster! The recent subprime bubble and bomb is a result of defaults including FIs greed too, that brought about an unprecedented collapse of giant global financial institutions.
Do we blame the bank for trying all ways and means to ensure loan takers keep their part of the bargain? After all, mutual respect is two way right?
So Bank Negara is upping the ante on the FIs in the use of debt collectors. Most likely the many complaints on the high handed tactics of these debt collectors and giving the government a bad name for not protecting the 'helpless' victims might be the reason for the latest ruling.
Should defaulters rejoice by this latest face saving ruling and don't fell morally liable and responsible to repay their borrowings? Is the 'protection' a passport for them to continue to be recalcitrant and delinquent loan takers?!
It seems that the government is being rather inconsistent as is their practice in dealing with defaulters who don't repay their loans to the FIs, and those who have not settled JPJ, police traffic summons, municipal council licences, assessments or fees, even quit rent!
Have we not seen arrests warrant being issued and defaulters being handcuffed led away in the middle of the day or night, their premises sealed, FRUs being called to give protection to the enforcers in sealing premises or tearing them down. When all these are happening, the defaulters and victims are left helpless and protests are usually met by being dumped into FRU trucks and being charged in court!
So when the authorities use force and act like thugs, they are protected by the law to carry out their 'debt collection'. But FIs are told they cannot do that and probably don't have the privilege over the legal boys in blue who bring along the police and FRU for protection together with chainsaws or locks or even caterpillar tractors in their 'debt collection' rounds!
Sure they are not using 'violence' but they are certainly harassing and intimidating the defaulters or recalcitrant trader with their show of force and determination to get the job done. One victim even got charged twice for the same offence!
It's a 'catch 22 situation' FIs face in appointing debt collectors. When they use them, they are branded ahlongs, and if their profit don't show astronomical billions and their NPLs (non-performing loans) is on the rise due to unsuccessful debt collection, they get whacked from their stakeholders and customers for not protecting their money and interests! Even sending a legal letter after repeated appeal and warnings is considered a high handed form of intimidation, insensitivity and inhuman act FIs have committed!
And the public gives a hue and cry and a loud sigh condemning those who refuse to settle study loans. But odd, the FIs loan defaulters are a 'precious golden fellos' who should be treated with dignity and respect when collect the payment. Not so the scholarship defaulters - they get their names published in the newspaper! Try doint that to house and vehicle defaulters and see what response you get!
Sure those in default may be in a precarious position and the future of their own life and that of the family can be threatened if debt collectors behave like thugs! There must be a closure on outstanding debts. Too often the debtor refuse to come to an amicable solution with the FI and vice versa. Too much pain as well as unnecessary cost to the FIs are being expended if there is no closure. The debtor turns himself into a fugitive, the FI is faced with the possibility of brickbats from shareholders for incurring high NPLs!
Debt resolution is a tedious, slow and at times a painful process for all parties concerned. And both the defaulter and FI shouldn't need to complicate the recovery process and heighten the suffering and pain by using debt collectors who really don't give a damn about the feelings of the debtor as long as they can get the fello to pay, they get their commission!
And this is where Bank Negara may be the last resort to reduce the complications and defuse the tensions caused that may even drive the debtor to retaliate by refusing to even bother to try and repay or save his house or car! Lives then get ruined!
When FIs succeed in repossessing the property, they may think their nightmare has ended in avoiding losses. But for the debtor, it is where a new tragedy, struggle or misery may start being left without a home and getting nothing from paying a certain length of time.
So there is wisdom in this saying purportedly by the ole sage Confucius "When you lie down and rest at the end of the day, make sure you have done what you need and not have to fear the knock on yur door in the dead of the night!
And when the pretty customer financial executive or whatever canggih title they call themselves these days approach you and ask with a smiling face and show you a Mother Theresa looking face "Sir would you like to take a housing loan, it's the best in town and let you own your dream house or mercs'.... there is some element of truth at least in the 'dream' part because it becomes just that if you fail to settle the RM450k mortgage you took a year ago!
With this latest directive will we see a new branding of debt collections come the new year who may dress up like going to some prom nite and greeting you like what you get when you enter a sushi restaurant. And while politely serving you the reclaim notice will also serve you a cup of tea and muffin, perhaps?
Debt Collectors Can't Use Violence
KUALA LUMPUR, Dec 21 (Bernama) -- Debt collectors appointed by financial institutions cannot use violence and harass loantakers, Deputy Finance Minister Datuk Chor Chee Heung said.
He said this was included in the debt collection fair practice guideline and should be followed by the appointed debt collectors.
"Financial institutions can use the service of debt collectors but they must follow the regulations in the guideline approved by Bank Negara Malaysia," he said in reply to a question by Senator Dr M. Malasingam in Dewan Negara here on Monday.
Other than forbidding violence and harassment, debt collectors should be ethical and were not allowed to call loantakers more than three times weekly.
"This is in line with efforts by Bank Negara Malaysia to strengthen the protection and professionalism structure of debt collection."
Chor said loantakers unhappy with the action of debt collectors appointed could complain to the financial institutions.
"As for those unhappy with the financial institutions, they can report the mattter to Bank Negara Malaysia," he added.- -- BERNAMA
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