Debt collectors going too far to recover loans

KUALA LUMPUR: Some debt collectors are resorting to harassing borrowers at their offices in order to get them to pay up, said MCA Public Services and Complaints Department head Datuk Seri Michael Chong.

Criticising their scare tactics, Chong said some collectors would also harass those who stood as guarantors for the loans.

“Some go to the borrower's office to harass them. We have also seen many cases in which they call on the borrowers at odd hours. They have even threatened loan guarantors.

“Those who borrow money must be responsible for their loans but this is not the way to get them to pay up,” he added.

Chong also expressed surprise that certain banks had outsourced their debt collection to agencies, especially for credit card loans.

“Some banks have admitted to outsourcing their collection but claimed that they were not aware of the tactics. I have spoken to them and have threatened to expose them if they did not take remedial measures. I have an obligation to the people,” he said.

It was “very normal”, added Chong, for some debt collectors to even resort to threatening borrowers with bankruptcy although legally, such a petition could only be filed if the loan amount was above RM30,000.

Chong advised borrowers not to ignore a bank's letter of reminder but to instead communicate with the institution, adding that the banks were generally “quite reasonable”.

Bank Negara Malaysia's Credit Counselling and Debt Management Agency advised those facing financial difficulties to contact it for advice and, where possible, loan restructuring.

“Not only do we provide financial education and counselling, we have a debt management programme for those eligible. We can negotiate with banks to reach a win-win situation. It is not the end of the road,” said AKPK trainer S. Nirmala during the Malay-sian Indian Economic Conference here yesterday.

On bankruptcy threats, Nirmala said many were unaware of the criteria, citing an example of a man who almost went to loan sharks over a RM5,000 credit card debt.

Call AKPK's toll free hotline at 1-800-88-2575 or log on to www.akpk.org.my for further information.