It is imperative that you repay your loan in full and on time by paying EMI regularly. However, certain unforeseen circumstances can affect your timely payments:
- Medical emergency
- Loss of job
- High inflation
- Rising interest rate
- Family going down to single income from double income
When you realise that the circumstances will not be temporary, it is best that you approach the lenders to arrange for some settlement or get help from a credit counselling agency to help you get through the situation with minimum damage to your credit score.
If, however, you continue with non-payment of the EMI, you not only run the risk of getting a bad credit report, but also have collection agents to deal with. Usually, three consecutive missed payments are enough to put you in the ‘bad debt’ category. Initially, the lenders will contact you, verbally and through written communication, to remind you to make payments, post which the debt collection agency takes over. Dealing with recovery agents feels unpleasant, irrespective of the amount of debt and the behaviour of the agent. It is better to speak to the bank when you fall behind on your payments as they are willing to help genuine cases by restricting the repayment plan, increasing tenure, etc.
While not paying your EMI is an offense that is not condoned, as a borrower, you do have some rights to protect yourself from debt collection agents. IBA (Indian Bank Association) has clear guidelines about the role of debt recovery agents to prevent them from using strong-arm techniques, harassing the defaulters and abusing their position. Since a lot of instances have come to forefront about the harassment experienced by people at the hands of the collection agents, it is necessary that people remain aware of their rights in case they come knocking.
- Inform the agent, whether on call or in person, that you are aware of your rights and that you will complain to the police/ file an FIR, if they get abusive.
- When a recovery agent comes to visit, ask them for their ID to determine they are truly from some recovery agency.
- Be calm when speaking with them, whether on call or in person, and make them confirm who sent them, which bank, which agency they are from and all the related details.
- Recovery agents have no rights to inform your relatives, neighbours or colleagues about your debt. You have a right to privacy. The agent cannot discuss your debt with anyone else. You, also, have full right to file a complaint against them with the bank.
- The agent can contact you only between 7am and 7pm. But if you work in a different shift, then they can call you beyond these hours. You can request them not to call you when you are at your workplace. They oblige such requests provided they don’t feel that you are avoiding them.
- The agents can contact you only on the phone number you provided.
- According to the rules, the agent has to speak in a non-abusive manner. They cannot harass, abuse, threaten use of violence, use obscene or profane language, call you continuously with the intent to be annoying, or make calls to your house without disclosing their identity. If he does not speak decently or indulges in any of the above, you can complain to the bank that you do not wish to deal with him. And as per rules, the bank has to investigate the matter. You can approach the bank ombudsman as well.
- You have the right to access the time, the number of calls and the content of your interactions with the agent. The bank is required to keep a note of all these and provide them to you under Right to Information act.
- In times of bereavement in the family, the agent cannot demand repayment. You can also request the agents not to contact you for a few days.
- Do not let the agent intimidate you into paying him the money or to pay what you do not owe.