No undue harassment of debtors
please, because:
- It helps neither collection nor relationship
- RBI says No to undue harassment and coercion
- Debtors know their rights and are assertive
- It is illegal; general Criminal Procedure Code (CrPc) applies
"Undue" suggests that what is done must, having regard to
the circumstances; extend beyond that which is acceptable or reasonable. It may
ensure that conduct will only amount to harassment where what is done goes
beyond the normal limits.
"Harassment” means persistent
disturbance or torment, and can extend
to frequent unwelcome approaches requesting payment of a debt. Generally, a
person will be harassed when frequently troubled
by a person. There is no requirement that the harassment involve a threat of an
illegal act.
The following will be construed
as undue harassment:
- The use of obscene or profane language or language
the natural consequence of which is to abuse the hearer or reader
- Causing a telephone to ring or engaging any person in
telephone conversation repeatedly or continuously with intent to annoy,
abuse, or harass any person at the called number
- The placement of telephone calls without meaningful
disclosure of the caller’s identity
- Calling work place after the debtor told not to
- Demanding more money than what is due/ overdue
- Sending collection letters that threaten a lawsuit,
garnishment, seizure of property
- Threats of action often, not intended to be taken
- Filing a suit in a venue other than where debtor
resides
- Communicating the status of debtor’s account with
third parties
- Contacting debtor’s employer or co-workers
"Coercion" need not be ‘undue coercion’. It is enough if
it contains an element of force or compulsion or threats of force or compulsion
negating choice or freedom to act. There is no requirement that the coercion
involve a threat of an illegal act.
The following will be construed
as coercion:
- The use or threat of use of violence or other
criminal means to harm the physical person, reputation, or property of any
person
- The publication of a list of debtors who allegedly
refuse to pay debts
- The advertisement for sale of any debt to coerce
payment of the debt
- Depositing a post-dated check early
- Threatening to take possession of the collateral /
property unless it can be done legally
- Contacting the debtor by postcard
- Sending collection letters on the letterhead of an attorney / Lawyer
Remember, your brand equity is more important for far term growth.
