Debt collectors in Singapore comply with the Credit Collection Association of Singapore’s code of conduct, but it doesn’t stop some unscrupulous individuals and companies to use coercion. If you applied for a personal loan from a licensed moneylender, harassment should never happen when they try to collect unpaid balances.
Whether or not there are laws governing debt collection, the reality often bears a different outcome for each borrower. Arson is an example of what debt collectors can’t do when you are behind loan payments. Loan sharks have been reported to set fires on HDB flats of the delinquent borrowers. Read on to find out how you can protect yourself or your family from illegal debt collection practices.
What Debt Collectors Can Do
You should expect a visit to your office from the debt collector. While that’s embarrassing, it’s within the acceptable practices of collecting money if they don’t use foul language or brute force. They can also call your house and ask for your whereabouts, although they should be calling you within business hours during the day. It’s unethical for them to call you at midnight to collect money.
Debt collectors aren’t restricted from stalking your social media accounts, so you need to be careful about what you post online. If you have photos showing lavish trips and shopping purchases, then your debt collector will be compelled to get what you owe them. Make sure that your profiles don’t give them any reasons to suspect that you’re lying about your finances.
If you signed a written agreement with a licensed money lender in Singapore, you are only obliged to pay them within six years of the agreed-upon repayment date. That doesn’t mean, however, that debt collectors won’t try to chase you for unpaid amounts despite not having a written agreement or six years have already passed. This is common for people who lend money to family or friends.
Take note that Singapore allows individuals to lend money to family or friends even without a licensed. You and anyone else isn’t permitted to lend money to businesses. Debt collectors can also speak with your family or friends about your financial obligations, but they shouldn’t experience harassment during each encounter
What Debt Collectors Can’t Do
You should feel safe at your home despite being bombarded with phone calls about your missed repayments. Arson has been a known problem that makes online or offline harassment seem like a better alternative for some borrowers. In 2016, Yishun North had the highest number of unlicensed moneylending harassment cases. The average number of cases reached 97 in Singapore during the same year.
These figures imply that there are still individuals who consider a personal loan with illegal lending companies. The good news is that loan shark harassment cases have steadily declined in recent years. There were more than 3,800 cases recorded in 2017 compared to 11,000 cases recorded in 2013.
If you’re currently dealing with harassment from anyone, you should know that they can’t form groups of more than five people to try and intimidate you. An example involves bringing 20 people to your home, place of work or business to disrupt your daily life. Call the police to have them arrested for illegal assembly.
The Protection from Harassment Act also ensures that individuals don’t feel distressed with verbal abuse from debt collectors. For instance, they broke the law when they threaten to expose you on social media. You shouldn’t be stalked going to and from your home or workplace as well.
Debt collectors aren’t allowed to pretend to be someone from a government agency or the police. Once you determine that they violated the law, you should report them to authorities and file a Protection Order. You must be able to prove that debt collectors are harassing you. It’s easier to do this if you owe money to companies than family or friends. Not all of us are willing to file a case against members of our inner circles.
What You Can Do to Avoid Harassment
The best way to avoid harassment is not borrowing money from loan sharks and unlicensed moneylending companies. It’s easier said than done but doing so will provide you with peace of mind that you won’t be a victim of arson or other violent acts.
You can distinguish a licensed lender through their means of communication. Reputable companies will not contact you to offer a personal loan. All applicants should originate from the consumer. If you receive a text or online message about such offers, then it’s likely that they are unlicensed money lenders. Legitimate lending companies will only accept applications in person or online after submitting the necessary documents and paperwork.
Loan sharks and other illegal lenders typically require you to sign a written agreement. Sometimes, you don’t have to sign a document at all. Licensed lending companies don’t engage in this kind of practice, as they are required to follow the regulations by the Monetary Authority of Singapore. You should visit and review the Ministry of Law’s list of licensed money lenders each time you transact with a company, even if you’re sure that they are licensed. The list may change from time to time.
You should remember that a code of conduct or a set of governing laws won’t stop unlicensed money lenders, loan sharks or even your friends and family to go after you to collect overdue personal loan repayments. You should be capable of recognizing what constitutes an unfair debt collection practice.
The likelihood of harassment is higher when you borrow money from a loan shark, so it’s always best to seek financial assistance from a licensed personal loan provider. Call us today and find out more about services and interest rates.