Psychological Torture by Debt Collectors

Over the past seven months the BN Perak Service and Complaints Centre has received complaints from more than 40 people on being harassed by agents from debt collecting agencies for not repaying their loans from the banks. Mohd Rawi Abdullah, head of the complaints centre said that the agents hand deliver the letter to the defaulter and thereafter go to their house at awkward hours asking for repayment. They call the persons at odd times on their land line and on the mobile phone and send SMSs. It is a mental torture and he is worried that it may lead the victims to commit suicide.

Rawi said that when he discussed this with his lawyers, they said that there is no clause in the agreement with the banks that states that the banks can appoint debt collecting agencies to collect on their behalf.

Rawi added that he contacted a few branches of Standard Chartered Bank and they informed that they do not use the services of debt collecting agencies. The Personal Data Protection Act 2010 does not allow banks to reveal particulars of their customers to third parties. Rawi questioned how the agencies managed to get particulars of the defaulters? He said that when he contacted Bank Negara, they agreed that banks cannot reveal particulars of customers to third parties.

Rawi said that the normal practice is for banks to send a Notice of Demand to the defaulter through their lawyers asking him to meet in court. During this meeting, agreement is reached on how the loan can be settled.

Rawi said he had written to Bank Negara about this problem, but no action has been taken.


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