This comprehensive blog aims to empower you with the knowledge and skills necessary to draft an effective legal notice to a bank for harassment. We’ll walk you through the process step-by-step, from understanding what constitutes bank harassment to sending the notice and dealing with the aftermath.

Understanding Bank Harassment

Bank harassment can take various forms, including incessant phone calls, threatening letters, or unfair practices related to loan repayment or account management. It’s crucial to recognize these behaviors and understand your rights as a consumer.

Also Read: http://How to File a Bank Harassment Complaint in India

Preparing to Draft the Notice

Before drafting the legal notice, gather all relevant documents and evidence related to the harassment. This may include correspondence with the bank, account statements, and records of communication. Additionally, familiarize yourself with relevant laws and regulations governing consumer rights and banking practices.

Essential Components of a Legal Notice

A legal notice typically includes the following components:

• Introduction: Clearly state your name and address, as well as the name and address of the recipient (the bank).
• Details of Harassment: Provide a detailed description of the harassment you have experienced, including dates, times, and specific instances.
• Legal Basis: Reference relevant laws or regulations that protect your rights as a consumer and prohibit harassment by financial institutions.
• Demand for Relief: Clearly state your demands, such as ceasing all harassment, issuing an apology, or compensating for damages.
• Deadline: Specify a reasonable deadline for the bank to respond to your notice and take corrective action.

Writing the Notice

When drafting the notice, use clear and concise language to convey your grievances and demands. Avoid emotional language and stick to facts and legal arguments. Consider seeking assistance from a legal professional to ensure the notice is drafted accurately and effectively.

Sending the Notice

Once the notice is drafted, send it to the bank via certified mail with return receipt requested. This ensures proof of delivery and allows you to track the response time.

After Sending the Notice

After sending the notice, monitor the bank’s response within the specified deadline. If the bank fails to respond or address your concerns satisfactorily, consider seeking further legal action with the assistance of a lawyer specializing in consumer rights or banking law.

Register with us today at https://loansettlement.com/ to learn more about our services and how we can help you!

Conclusion

Drafting an effective legal notice is a crucial step in addressing harassment issues with a bank. By asserting your rights and clearly communicating your grievances, you can hold financial institutions accountable for their actions. However, it’s essential to approach the process with diligence and seek professional legal advice when needed.

Remember, you don’t have to tolerate harassment from your bank. Take assertive action and stand up for your rights as a consumer.

Loansettlement.com is India’s leading loan settlement platform. We have a proven track record of successfully settling loans for our customers. Our team of experts will work with you to create a customized repayment plan that fits your budget and helps you get out of debt as quickly as possible. We understand the stress and anxiety that comes with being in debt, and we are here to help you get out of it as quickly and easily as possible.

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Mental Harassment by Banks

Mental harassment in banking refers to any behavior or action by a bank or its representatives that causes significant emotional distress or discomfort to a customer. This can manifest in various forms, ranging from excessive communication to discriminatory practices.

1. Excessive Communication

One of the first signs of mental harassment by a bank is excessive communication.  Excessive communication refers to a barrage of calls, emails, or messages from the bank or its representatives that go beyond what is necessary for regular banking transactions. This constant bombardment of communication can create feelings of overwhelm and anxiety for the customer, especially if they feel pressured to respond or take action immediately.

2. Threatening Language

Threatening language involves the use of intimidating or coercive statements by bank representatives towards customers. Whether explicit threats of legal action or implied consequences for non-compliance, such language instills fear and stress in customers, making them feel vulnerable and powerless in their banking relationship.

3. Unwarranted Pressure for Payments

Banks sometimes exert undue pressure on customers to make payments, regardless of their financial situation. This could involve persistent demands for repayment of loans or fees, even when the customer is facing financial difficulties. The relentless pressure to meet financial obligations can lead to feelings of helplessness and frustration, exacerbating the customer’s emotional distress.

4. Invasion of Privacy

Invasion of privacy occurs when banks access personal information without consent or share confidential details with third parties without authorization. This breach of trust can leave customers feeling violated and vulnerable, contributing to their emotional distress and discomfort in their banking relationship.

5. Misinformation or Deception

Misinformation or deception involves the dissemination of false or misleading information by bank representatives. This could include inaccurate details about financial products or services, deceptive advertising practices, or misrepresentation of terms and conditions. Customers who fall victim to such misinformation may feel betrayed and distrustful of the bank, leading to heightened stress and anxiety.

6. Discrimination or Bias

Discrimination or bias based on factors such as race, gender, or economic status is unacceptable in banking relationships. When customers experience discrimination or bias in their interactions with the bank, it not only undermines their trust in the institution but also causes significant emotional harm. Such behavior can lead to feelings of anger, frustration, and a sense of injustice among affected customers.

7. Ignoring Customer Concerns

Ignoring customer concerns or complaints is a clear indicator of mental harassment. When banks dismiss or disregard the legitimate concerns of their customers, it sends a message that their voices are not valued or respected. This lack of acknowledgment can further exacerbate feelings of frustration and powerlessness, contributing to the customer’s overall emotional distress.

Also Read:https://www.loansettlement.com/blog/how-to-file-a-bank-harassment-complaint-in-india/

Conclusion

In conclusion, recognizing and addressing signs of mental harassment by banks is essential for preserving mental well-being and maintaining healthy banking relationships. By staying vigilant and assertive, customers can protect themselves from undue stress and anxiety. If you experience any form of harassment from your bank, don’t hesitate to seek support from  loan settlement. Remember, your mental health matters, even in the realm of banking.

Register with us today at https://loansettlement.com/ to learn more about our services and how we can help you!

The post 7 Signs of Mental Harassment By Bank You Shouldn’t Ignore appeared first on Loan Settlement.

Understanding Bank Harassment

Bank harassment encompasses a range of actions that cause distress or inconvenience to customers. This can include aggressive debt recovery practices, unauthorized transactions, or persistent and intrusive communication. Recognizing the signs of harassment is crucial in determining the appropriate course of action.

If you are facing any harassment from recovery agents, consider loan settlement. Register and talk to our counsellors for more information.

Preparing for Your Complaint

Gathering evidence is key when filing a complaint. Document all communication with the bank, noting dates, times, and the nature of each interaction. Collect relevant documents such as account statements, loan agreements, or any written correspondence that supports your case.

Internal Complaint with the Bank

Initiate the complaint process by reaching out to the bank’s customer service. Clearly articulate your grievances and provide the evidence collected. Most banks have a dedicated grievance redressal mechanism, and this step allows them an opportunity to resolve the issue internally.

Escalating to Higher Authorities

If the internal complaint resolution is unsatisfactory, escalate the matter to higher authorities within the bank. This may involve contacting the nodal officer or the banking ombudsman, depending on the bank’s hierarchy. Ensure you maintain records of all interactions at every level.

Lodging a Complaint with RBI’s Ombudsman

If your concerns remain unaddressed, the next step is to approach the Reserve Bank of India’s (RBI) Banking Ombudsman. The RBI has established this mechanism to independently review and resolve disputes between customers and their banks.

Seeking legal Help

When traditional methods fail to address bank harassment, seeking legal recourse becomes essential. To proceed effectively in this process, begin by researching a lawyer with expertise in financial matters. Arrange an initial consultation to present your case comprehensively, allowing the lawyer to assess its merits and propose potential legal remedies. Understand the available legal avenues, such as initiating proceedings, seeking compensation, or employing injunctive relief. The lawyer will draft legal notices, prompting the bank to take the matter seriously. Negotiation or mediation may precede litigation, aiming for a swift resolution.

Register with us today at https://loansettlement.com/ to learn more about our services and how we can help you!

Tips for an Effective Complaint

• Clearly articulate your grievances and provide supporting evidence.
• Be persistent but polite in your communication.
• Keep a record of all interactions and correspondence.
• Familiarize yourself with your rights as a banking customer.

Conclusion

In conclusion, filing a bank harassment complaint in India can be a daunting process, but it is essential for protecting your rights as a consumer. By understanding the stages of the complaint process and being diligent in documenting your case, you can navigate the path to justice. Remember, every individual has the right to seek redressal for harassment, and by following these steps, you can assert that right effectively.

Also read:https://www.loansettlement.com/blog/legal-protection-against-harassment-by-recovery-agent/

The post How to File a Bank Harassment Complaint in India appeared first on Loan Settlement.

The Responsibilities of a Recovery Agent

Recovery agents are tasked with the responsibility of locating and negotiating with individuals who are unable to meet their financial obligations. Recovery agents play a pivotal role in locating defaulters, negotiating repayment plans, and ensuring legal compliance. These responsibilities are designed to facilitate financial rehabilitation, but concerns about harassment highlight the need for a balanced approach.

Locating Defaulters

One of the primary tasks of a recovery agent is to locate individuals who have defaulted on their financial commitments. This involves thorough research, often utilizing advanced tools and databases to trace individuals who may have changed locations or contact details. While locating defaulters is a critical task, it is essential for recovery agents to exercise discretion and respect individuals’ privacy. Harassment concerns often arise when agents resort to intrusive methods that may cause distress to debtors.

Negotiating Repayment Plans

Once located, recovery agents engage in negotiations with defaulters to establish viable repayment plans. These negotiations require a delicate balance between empathy and assertiveness, as agents work to find solutions that are both realistic for the defaulter and acceptable to the lending institution. Negotiations require a delicate balance. Harassment concerns may surface if recovery agents employ aggressive tactics, undermining the spirit of cooperation necessary for establishing reasonable repayment plans.

Legal Compliance

Recovery agents must adhere to strict legal guidelines and ethical standards. To avoid potential harassment issues, recovery agents must strictly adhere to legal guidelines. Awareness of the legal landscape surrounding debt recovery is crucial to ensure that all actions align with ethical standards, protecting the rights and well-being of debtors.

The Impact of Recovery Agents

The work of recovery agents extends beyond mere debt collection; it contributes significantly to the financial rehabilitation of individuals. By facilitating communication and negotiation, recovery agents create pathways for debtors to overcome financial challenges and rebuild their creditworthiness.

Addressing Concerns: Harassment by Recovery Agents

Understanding the Issue

Concerns about harassment often arise from aggressive communication tactics, frequent calls, and disrespectful behavior exhibited by some recovery agents. It is crucial to acknowledge these issues and work towards a more ethical and respectful approach.

Promoting Ethical Practices

Lending institutions and recovery agencies must prioritize ethical practices. Training programs and strict guidelines can ensure that recovery agents conduct their duties with professionalism, empathy, and respect, mitigating concerns related to harassment.

Also Read:https://www.loansettlement.com/blog/want-to-file-a-complaint-to-rbi-against-bank-recovery-agents/

Conclusion

In conclusion, the role of a recovery agent is multifaceted, encompassing responsibilities that contribute to financial rehabilitation. Addressing concerns related to harassment is paramount to maintaining trust and fostering positive outcomes. By emphasizing ethical practices, recovery agents can fulfill their responsibilities while promoting a culture of respect and cooperation in the pursuit of financial recovery.

Our team of experienced professionals can help you negotiate repayment plans with your lenders.

In addition to offering tailored advice and guidance, Loansettlement.com also provides access to financial education materials that can help you make informed decisions about your finances.

Whatever situation you are in, don’t hesitate to reach out for help with your loan payments.

We understand that everyone’s situation is unique, so we offer personalized advice and assistance that fits your specific needs.

With the right advice and assistance, you can get back on track and make progress toward becoming debt-free once again.

Register with us today at https://loansettlement.com/ to learn more about our services and how we can help you!

The post Addressing Harassment Concerns in Debt Recovery Practices appeared first on Loan Settlement.

Harrassment by recovery agents is a serious problem. If you have been the victim of harrassment, you can file a complaint with Bank Ombudsman. You can also contact your local consumer court. If you feel that you have been threatened or intimidated by a recovery agent, you may even contact your local police department.

Bank Ombudsman scheme

Bank Ombudsman scheme is one of the best options to register your complaints. It is a service provided by Reserve Bank of India to resolve complaints against banks relating to certain services rendered by them.

To file a complaint with Bank Ombudsman, the complainant has to approach the concerned bank first and give them a chance to resolve the complaint. If the matter is not resolved by the bank or if the complainant is not satisfied with their response, he/she can approach the Bank Ombudsman.

The process of filing a complaint with Bank Ombudsman is simple and hassle free. The complainant can approach the Bank Ombudsman either in person, by post or through email. When filing a complaint, be sure to include as much information as possible. Include the name and contact information of the recovery agent, as well as any witnesses that may have been present. If you have documentation of the harrassment, such as text messages or emails, be sure to include this in your complaint.

Once the complaint is received, the Ombudsman will enquire into it and try to resolve the matter between the parties involved. If the matter is not resolved, he/she can pass an award in favour of the complainant. The award passed by the Ombudsman is binding on the bank.

Do note that while it is possible to file a complaint against a recovery agent through Bank Ombudsman scheme, it is not the only option available to you. If you feel that your complaint has not been resolved adequately, you can also approach the court or the local police department.

Take help from professional company like Loansettlement.com

Also, there are professional companies which can help you prevent harrassment and settle your loans with the banks on your behalf. Loansettlement can help you get in touch with the right people and put an end to harrassment from recovery agents. They have a team of experts who are well-versed in the process of loan settlement.

These are just a few of the options available to you if you want to file a RBI complaint against bank or recovery agent. We encourage you to research all of your options before making a decision. Once you have decided where to file your complaint, be sure to gather all relevant documentation and evidence. This will help support your case and increase the chances of a successful resolution.

The post Where can I file a complaint against recovery agent? appeared first on Loan Settlement.

1. What constitutes bank harassment?

Bank harassment can take many forms. It can be anything from aggressive debt collection tactics to unwanted phone calls and emails. If you feel that you are being harassed by a bank or other financial institution, it is important to keep track of the incidents. This will be helpful evidence if you decide to file a lawsuit.

Keep track of the following:

-The date and time of each incident

-What happened during the incident

-Witnesses to the incident (if any)

-Any documentation or correspondence related to the incident

2. How to recognize if you’re being harassed by your bank?

There are a few key things to look out for if you think your bank may be harassing you. First, keep track of how often you are being contacted. If you are getting multiple phone calls or emails every day, this may be considered harassment. Second, pay attention to the tone and content of the communications. If they are threatening or abusive, this is a red flag. Finally, make sure you understand your rights. If you feel like your bank is not respecting your boundaries, this may be considered harassment.

3. Whether or not you can sue your bank for harassment?

Yes, you can sue your bank for harassment. To sue a bank for harassment, you will need to prove that the bank’s actions were intentional and that they caused you emotional distress. You will also need to show that you suffered some sort of financial loss as a result of the harassment. If you have been the victim of bank harassment, you may be entitled to damages. These can include compensatory damages (for things like emotional distress) and punitive damages (to punish the bank for its actions). You may also be able to recover any financial losses that you have incurred as a result of the harassment.

4. What to do if you’re being harassed by your bank?

If you are being harassed by your bank, the first step is to reach out to an experienced lawyers. They will be able to review your case and advise you on the best course of action. They can help you gather the evidence you need to build a strong case. You should also keep track of the incidents, including the date, time, what happened, and any witnesses. This will be helpful evidence if you decide to file a lawsuit. They can also advise you on what steps to take next to protect yourself from future harassment. With their help, you can hold the bank accountable and get the compensation you deserve.

Don’t let bank harassment go unchecked. If you have been the victim of this type of abuse, know that you have legal options available to you. Contact an experienced attorney today to discuss your case.

This blog post is provided for informational purposes only and should not be construed as legal advice. If you need legal advice, please contact a lawyer or consult professional agency like Loansettlement.com. We will not only save you from all kinds of harrassments but will also negotiate with your bank on your behalf to settle your loans at 50% or less.

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What are the laws governing debt collection agencies in India?

The laws governing debt collection agencies in India are the Recovery of Debts & Bankruptcy Act, 1993 and Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest (SARFAESI) Act, 2002. These Acts requires debt collectors to provide the debtor with a written notice of the debt. The notice must include the amount of the debt, the name and address of the creditor, and a statement that the debtor has a right to dispute the debt.

These Acts also prohibit debt collectors from using abusive, unfair, or deceptive practices when collecting debts. They also give consumers the right to file a complaint against a debt collector if they believe they have been harassed.

Besides these Acts, there are several Supreme Court judgements as well as RBI guidelines which protect the borrowers from any harassment.

How do these laws protect consumers from harassment by debt collectors?

The laws governing debt collection agencies in India protect consumers from being harassed by prohibiting debt collectors from using any unfair or unconscionable means to collect a debt. This includes harassment, threats, intimidation, and undue pressure. Furthermore, the act requires debt collectors to provide the debtor with a written notice of the debt.

Are there any loopholes that allow debt collectors to harass consumers?

Unfortunately, there are some loopholes that allow debt collectors to harass consumers. For example, the law does not prohibit debt collectors from contacting the debtor multiple times. Additionally, the law does not require debt collectors to have a valid reason for believing that the person they are contacting is actually the debtor.

What can you do if you’re being harassed by a debt collector?

If you are being harassed by a debt collector, there are several things you can do:

First, you can send the debt collector a written notice demanding that they stop contacting you. This notice should be sent by certified mail and should include your name, address, and phone number.

Second, you can file a complaint with the bank and if you do not receive any relief, you can file a complaint with the Banking Ombudsman.

Finally, you can also file a lawsuit against the debt collector. If you win your case, the court may order the debt collector to pay you damages.

No one deserves to be harassed by a debt collector. If you are being harassed, it is important to know your rights and take action. By doing so, you can protect yourself from further harassment and hold the debt collector accountable for their actions.

If you need help, don’t hesitate to reach out to Loansettlement.com, India’s leading debt settlement company.

Register Now to get a call from our legal and financial advisors.

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What is recovery agent harassment?

Loan recovery agent harassment is when a debt collector repeatedly contacts you in an attempt to collect on a debt. This can be done through phone calls, emails, text messages, or even in person. The goal of the loan recovery agent is to get you to pay back the debt as soon as possible, and they will often use whatever means necessary to get you to do so.

Following actions will be considered harassment:

Without your knowledge, contacting your friends and relatives about your debt.

Calling you and putting mental pressure on you to pay their loan EMIs.

Threatening you or your family or relatives.

Trying to humiliate you by coming to your workplace or home without adequate information.

Insulting you in public by claiming that you’re in debt and that you are not able to pay.

What are the RBI guidelines for recovery agents?

The RBI has put in place some guidelines for debt collectors that are meant to protect consumers from harassment. These guidelines include:

• Debt collectors cannot call you at work if they know that you are not allowed to receive personal calls there.
• They cannot harass or threaten you in any way.
• They cannot use obscene or abusive language when communicating with you.
• They need to carry bank’s identification and authorization letter.
• They cannot contact you before 7 am and after 7pm.
• If a debt collector does any of these things, you can file a complaint with the RBI.

How to deal with loan recovery agent harassment?

If you are being harassed by a loan recovery agent, the first thing you should do is try to calmly explain your situation. Many times, these agents are just doing their job and they don’t realize that they are causing undue stress. If you can calmly explain your financial situation, they may be more understanding and willing to work with you.

If this does not work, here are a few things that you can do to deal with loan recovery agent harassment:

– Keep track of all calls, emails, and text messages from the debt collector. This will help you to document the harassment and prove that it is happening.

– Talk to a lawyer about your rights and what you can do to stop the harassment.

– File a complaint with the RBI if the debt collector breaks any of their guidelines.

If you are experiencing harassment from a loan recovery agent, don’t hesitate to take action. The sooner you address the situation, the sooner it will be resolved.

What are the legal remedies available to stop harassment?

If you are being harassed by a loan recovery agent, there are a few legal remedies available to you. You can file a complaint with the RBI, or you can talk to a lawyer about your rights and what you can do to stop the harassment. You may also be able to file a civil lawsuit against the debt collector if they have broken any laws.

Here are some specific legal remedies that you can explore:

Filing a complaint at the police station

You can submit a formal complaint with the police against the bank or the recovery agent. Once you report them to the proper authorities, they are likely to cease their harassment activities.

Filing an injunction suit

A civil injunction suit can be filed in court for interim relief against the bank and compensation for abuse.

Filing a defamation suit

You could file a defamation complaint against the bank and recovery agent if they have violated RBI guidelines and tried to defame you.

Trespassing suit

You can sue banks directly for unlawful entry and trespassing if debt collection agents enter your home or office without prior permission or consent.

Complaint to your bank

If you’re facing any kind of harassment from a third-party recovery agent, you can take that complaint directly to the bank’s ombudsman.

Complaint to RBI

If your grievances are not resolved by bank’s ombudsman, you can file a complaint with the RBI and serious action can be taken by RBI if the bank or its agents are found to have violated RBI guidelines.

Recently, RBI imposed a penalty of Rs.2.5 crores on Bajaj Finance for harassment of customers by their recovery agents. You can see from this case that RBI is serious about enforcement of its guidelines and protection of the borrowers against this kind of illegal harassment.

These were some of the tips for handling harassment from loan recovery agents.

If you need any help, don’t hesitate to register at Loan Settlement Agency. We not only provide anti-harassment services but will also help you to settle your loans with the banks at 50% or less.

Blog Brief

Agar aap apne personal loan ki payment nahi kar pa rahe, toh aapko loan recovery agents pareshani mein daal sakte hain. Recovery agents loan vapis lene ke liye alag-alag tareekon ka istemal kar sakte hain, jaise ki bar-bar calls karna, galat bhasha ka istemal karna, Aapke relatives tak ko pareshan karna. RBI ne consumers ko aise situation se bachane ke liye kuch guidelines banaye hai, jaise harassment calls na karna, kaam ke samay phone nahi karna, aur galat bhasha ka istemal na karna.

Agar apko Loan Recovery agents harass kar rahe hain toh sabse pehle aap apni situation unko shanti se samjhaye, lekin agar phir bhi situation nai theek ho tho ap RBI mein shikayat darj kara sakte hain. Samay par kadam uthana zaroori hai, kyunki RBI un lenders ke khilaf zarure karwai karegi, jo borrowers ko pareshan karte hain.

Aap chahe toh Loansettlement.com se bhi madad le sakte hai. Agar aapko loan ki repayment mein mushkil ho, toh aap Loansettlement.com par register kar sakte hain. Yeh bank ke sath negotiate karke apke loan ko kam amount main par settle karne mein madad karegy aur
harassment call se bhi bachayenge.

Lawyers Speak

My client had been enduring severe harassment from the recovery agents of a bank. He was receiving an overwhelming 45 to 50 calls per day, a clear violation of the code of conduct guidelines for recovery agents in 2023 set by the RBI. Moreover, he also received messages threatening communication with his family members, which directly contravened RBI guidelines. After thoroughly understanding the client’s issues, our legal team escalated a complaint to the bank’s nodal officer, highlighting the harassment our client was facing and advising him to activate the do not disturb (DND JIO) feature to prevent spam calls. The complaint detailed the client’s situation and urged the nodal officer to take prompt action to alleviate our client’s mental agony. Fortunately, the complaint to the nodal officer spurred action, resulting in the addressing of our client’s concerns and ultimately leading to the resolution of the harassment issue.

The post How to Stop Harassment from Loan Recovery Agents? appeared first on Loan Settlement.

The recovery process usually involves negotiating certain conditions of the loan agreement to help the borrower to repay the dues. Debt usually becomes bad when it hasn’t been paid for three months consecutively and lenders call within this time to check if the repayment was forgotten or if it was unavoidable. The borrower, after discussion, is provided with sufficient time to repay the dues. 90 days past the due date, lenders appoint recovery agents. Mandated by the RBI lenders are to provide details of the recovery agency on their website. It is the borrower’s responsibility to verify the authenticity of the agent.

Agents work on tight schedules engaging in multiple cases every day. They usually call in the first 18-30 days to seek information and time for the payments due.  Agents usually call between 7 am to 7 pm unless otherwise requested by the borrower due to business circumstances or occupational obligations. RBI also mandates a recording of conversation- time, content, and number of calls that were made by the agent to the borrower. The same should be made available when demanded by an authority.

If the due remains unpaid despite the efforts, it automatically enables the agent to meet the borrower personally. However, the visit is to be duly informed. The agent must conduct themselves according to the code of conduct laid down by the RBI. It promotes courtesy and fair treatment as per following guidelines:

(a) The borrower will be contacted at the place of their choice.

(b) Identity and Authority of the representative would be made known at the first instance to the customer.

(c) Client’s privacy must be always respected.

(d) The interactions should be civilized.

(e) Representatives will only contact the customer between 7 am- 7 pm.

(f) Any request to avoid calls at a particular time must be honored.

(g) The time, the number of calls, and content will be documented.

(h) All assistance would be given to resolve disputes.

Furthermore, the contract between the lender and agent must ensure lawfully moral methods during the process.

Lenders are vicariously accountable for the actions of the agents. Inducing the agent with incentives can lead to serious complications. Change in the agent appointed to a borrower must be duly notified by the lender promptly and such agent must carry the notice of appointment along with an identity card.

Following the above narrative, here are a few pointers to avoid recovery agents entering the doorsteps of your house:

(a) The most obvious and foremost- Pay the EMIs on time. Never delay the repayment of dues if possible.

(b) Plan and create reserves to use during the slump. Use them to get out of the debt.

(c) Just like any other relationship, communication is key here as well. Make sure to inform or ask for advice from the lender in case of an unforeseen circumstance that builds trust and understanding.

(d) Avoiding calls or meetings with the agent will create mistrust. Determine your payment ability and do not overpromise.

To err is human. Not everyone traps themselves in debt willingly. There are multiple methods and assistance provided to help get out of a debt trap.  Instead of carrying the burden alone, it is advisable to seek help from lenders, family and friends and professionals in debt settlement. Moreover, RBI monitors the work done by lenders and agents to make the borrower or client comfortable. With the proper knowledge and assistance, what seems strenuous can be finished smoothly.

If you are facing harrassment from the recovery agents, register and talk to our counsellors.

The post How to Deal With The Loan Recovery Process  appeared first on Loan Settlement.

Recovery agencies are third-party agencies appointed by banks to follow up on unpaid dues. Unfortunately, there are many occurrences of unlawful behaviour by recovery agents, who were trying to recover the debt on behalf of banks. Not only have people had to face embarrassment in front of their families, but many have also faced bullying and physical threats.

In a recent instance, an 81-year-old lady was severely harassed by recovery agents—she received 375 threatening calls regarding her son’s unpaid bank dues. After she approached the police, a case was filed against these agents. According to a report in The Times of India, a private bus was stopped, and 42 passengers were held hostage for three hours by recovery agents, who wanted to recover money from the travel company which owned the bus.

To protect the consumers from harassment, RBI has issued certain guidelines which are mandatory to be followed by banks and their recovery agents:

1. Banks should inform the borrower the details of recovery agency firms / companies while forwarding default cases to the recovery agency.
2. Recovery agent should carry a copy of the notice and the authorization letter from the bank along with the identity card issued to him by the bank or the agency firm / company.
3. If 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 authorization letter along with his identity card.
4. The notice and the authorization letter should, among other details, also include the telephone numbers of the relevant recovery agency.
5. The up to date details of the recovery agency firms / companies engaged by banks should also be posted on the bank’s website.
6. 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.
7. Each bank should have a mechanism whereby the borrowers’ grievances with regard to the recovery process can be addressed. The details of the mechanism should also be furnished to the borrower while advising the details of the recovery agency
8. The Honourable Supreme Court has observed that loans, personal loans, credit card loans and housing loans with less than Rs.10 lakh can be referred to Lok Adalats. Banks are encouraged to use the forum of Lok Adalats for recovery of personal loans, credit card loans or housing loans with less than Rs.10 lakh as suggested by the Honourable Supreme Court.
9. Banks are encouraged to have in place an appropriate mechanism to utilise the services of the credit counsellors for providing suitable counselling to the borrowers where it becomes aware that the case of a particular borrower deserves sympathetic consideration.
10. 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.
11. 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. Complaints received by the Reserve Bank regarding abusive practices followed by a bank’s recovery agents would invite serious supervisory disapproval.
12. Banks were advised that in the matter of recovery of loans, (a) the lenders should not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc. (b) the banks should ensure that agents engaged by them for debt collection refrain from action/s that could damage the integrity and reputation of the bank (c) 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 into the privacy of the borrowers’/ credit card holders’ family members, referees and friends, making threatening and anonymous calls or making false and misleading representations.

Landmark Judgements

In the case of Manager ICICI Bank V. Prakash Kaur, The Supreme Court made the following observations:

The entrance of the multi national banks into the country has spread the culture of Credit Cards, Loans on an unimaginable level where rather than the rich, it is the middle class, the lower middle class and the lower class who are at the receiving end of the bonanzas promised by the Banks.

Inadequate information on the Credit Card application, Loan Applications, Advertisements or even while meeting the bankers in person in respect of the lending rates and hidden charges, leads to this class of people being lured into the buying of the Credit Cards or taking of the home loan or education loan without knowing the ramifications of non-payment and default.

A man’s self respect, stature in society are all immaterial to the agent who is only primed at recovery. This is the modernized version of Shylock’s pound of flesh. No explanation is given regarding the interest charge and the bank takes cover under the guise of the holder of the card or loan having signed the agreement whose fine print is never read or explained to the owner.

When a harassed man approaches the Court or the police station he is not armed with a recording phone and finds it difficult to give evidence of the abuse he has suffered. Here the bank gets away with everything. Young and Old members of the family threatened on streets, institutions and also at home at godforsaken hours by these agents who have the full support of their contractor bank.

Using of the abusive language for recovery is the norm of the day for most nationalized or multi national bank or non-nationalized bank. Though some are smart enough to record the abuse and proceed to establish the same through Court of Law, most of them are unfortunate not to have recourse to it. Such people form the majority and such litigations are pending in large volumes before the Civil and Consumer Courts. Again the banks escape liability since these agents are not salaried employees of the bank and hence not directly liable for anything.

In the case of Smart Security Secret Service Agency v. State Bank of India, the High Court of Kerala observed that “In a democratic country having a well-established independent judiciary and having various laws, if muscle men are engaged to recover dues to the bank, there is no doubt that it will create lawlessness. In a country governed by rule of law, the recovery of loans by banks and other financial institutions cannot be done otherwise than by due process of law. Taking resort to strong-arm tactics is not only unlawful, but also unethical and opposed to public policy as also against protection of public interest.”

What can one do when threatened or harassed by recovery agents?

In a perfect world, there would be no loan defaults. But we don’t live in a perfect world – loan defaulting is a reality of life. If your name ends up in the list of loan defaulters, it doesn’t mean someone can harass or bully you; there are proper ways of dealing with the matter, for example, sending a notice, asking for a statement, and many more. If one is being ill-treated, here are a few things that can be done to ensure your safety and avoid harassment:

1) File a complaint

If a recovery agent is crossing the limits of decency, one has the right to file a complaint. You must first contact the particular bank branch and inform them about the issue. If they do no revert back, you can file a police complaint. An official complaint should be filed against the bank and the recovery agency and the police is bound to acknowledge the receipt of your complaint.

An FIR can be lodge against the bank and the harassing agent at a police station for intimidation and harassment under section 503, Section 506 and section 294 of Indian Penal Code, 1860. If the police does not take any action or doesn’t register an FIR, then a complaint can be filed before a judicial magistrate under section 156(3) Criminal Procedure Code, 1974.  Furthermore, if there is use of vulgar language against a woman than a complaint can be lodged under section 509 of Indian Penal Code, 1860.

2) Suit for Injunction against the bank and recovery agents

A civil suit for injunction with an ad-interim relief for an intervening or temporary period of time can be filed against the bank and recovery agent in the court. This can be done to make sure that bank officials and recovery agents do not visit your home for the recovery of dues. This can help one from being harassed and can buy time to repay the debts.

3) Complaint with the Reserve Bank of India (RBI)

After getting several complaints from customers and seeing several lawsuits filed against the banks and recovery agents, the RBI issued detailed guidelines for banks and recovery agents. Thus, if one feels threatened, unsafe, and helpless, they have the option to file a complaint with RBI.

4) Defamation suit

Anyone who feels he or she has been mistakenly accused of something in public, through words or gestures, spoken, written, or by implication, can file a defamation suit in a court of law. If the debt recovery is based on erroneous information that led to the loss of your score, then you can file a defamation suit against the bank and recovery agency.

5) Trespass complaint

If the recovery agents of the bank illicitly enter your house without permission, then a trespass complaint can be filed against them for violating your rights. Trespass is a physical intrusion by a person in a property belonging to another person.

6) Extortion complaint

If the recovery agents forcefully recovers the amount, an extortion case can be filed against them.

If you are facing any harrassment from recovery agents, consider loan settlement. Register and talk to our counsellors for more information.

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