You might be thinking that if you stay away from a loan shark, you would never have to deal with debt collectors. Unfortunately, that’s not entirely correct.
If you have any kind of unpaid debt or outstanding balance, the corporations, financial institutions, or individuals you transact with can hire a debt collector to help them recover the money you owe them.
A debt collection agency earns by getting a fee upfront, then a commission, or a percentage of the amount of the money collected from debtors later on. This is why they will make sure to collect that debt by doing whatever they can under Singaporean laws.
However, the lines between legal and illegal collection methods might be blurry for some people. Most people who don’t have experience with debt collectors are unsure about what these collectors can or cannot do legally.
In this article, we will discuss that and explain how you can best deal with them.
Just like how we deal with any other problems we have in life, it’s always better to face obligations head-on. Even if you don’t have the available money to pay upfront, you should coordinate and communicate with your debt collector.
Avoiding them would only be useless because they will inevitably find you. Please don’t wait for them to approach people you know to look for you or use other roundabout ways to reach you.
For you to know whether you’re being treated properly by your debt collector, it’s important to understand what they can or can’t do under the law.
- Debt collectors can talk to family and friends
Because debt collectors track down people who never want to hear from them ever, they use all available legal means to find those who owe them money and collect payment. They can figure out your location in many different ways.
They can also check the public information on your social media accounts to see the places you frequent and where you’re currently staying. Most people update and post their activities and location live on Instagram Stories or Twitter. If your followers can know where you are and what you’re doing, it would be correct to assume that your debt collector can know about it as well.
Another way they can reach you is through your friends, family, and even your co-workers. Not only can they go to your house or workplace to look for you, but they can also call your friends and your office. They’ll be speaking to other people in your life about your financial obligations.
- Debt collectors can help mediate and negotiate loan repayment plans
As much as everyone hates debt collectors, they’re not all bad. The dislike surrounding debt collectors in reality probably isn’t because of how they collect payments but because they collect payments from people in the first place. No one wants to part with their money, so people generally find encounters with debt collectors stressful.
However, despite the common misconceptions about debt collectors, they actually use legal means to collect. They operate according to laws like the Protection from Harassment Act which makes excessive badgering punishable by law, even if it’s for the lawful purpose of collecting the victim’s debt.
You can think of debt collectors more like assertive bank agents rather than members of the mafia. If they haven’t already offered you other repayment solutions, you can even try to negotiate your debt, and they will pass it on to your creditor.
- Inflicting Injury
In general, anything that other people can’t do legally, debt collectors can’t also do, like inflicting injury. Legal debt collectors are professionally trained agents and they follow a code of conduct established by the Credit Collection Association. This act includes inflicting physical harm on your person or your family and pets. You normally don’t need to worry about debt collectors physically hurting you. But if they do, you should report them because it’s against the law.
- Harassment, Threats or Intimidation
The same goes for harassment. Debt collectors are not allowed to harass, intimidate or threaten you with an illegal act. They can only threaten to sue you or seek other legal actions to collect the money. Anything that causes a debtor undue distress could constitute verbal harassment.
They also cannot vandalize your house with signs prompting you to pay your debts.
- Unlawful Stalking
Debt collectors are not allowed to follow you around after work, loiter near the place where you currently live, or show other people compromising pictures of you.
- Unlawful Assembly
Debt collection agencies are only allowed by law to send five people or less to collect from debtors. If a group of more than five debt collectors approaches you to collect money, they can be arrested for illegal assemble.
Make sure that you’re paying for an obligation that has already prescribed because if it has, your creditors are no longer entitled to that amount. Check the Statute of Limitations for different types of debts to see if enough years have passed to absolve you of your debt.
When entering into any transaction or contract, you should always get all the agreements and terms in writing, not only for use in any future legal proceeding but also for reference in the future to avoid confusion. This advice also applies when extinguishing obligations through payment. You must document the amount you paid and to whom so you can use it later on when seeking legal recourse.
It’s typically not safe to give out your bank account information to strangers because of security reasons. And if you use a check to pay, it might get tampered with. To protect your funds, it would be safest to use a third-party payment service provider when paying debt collectors.
When engaging with debt collectors, make sure to check their credentials to see if they’re legitimate and not scammers or loan sharks. There are legal agencies out there authorized and licensed to collect debts. Some examples include:
- National Debt Collector
- Rocket Debt Collection
- JMS Roger
- Alan & Steiner Debt recovery Pte Ltd
If you’re unsure, you can check with the Credit Collection Association of Singapore – Home to see if you’re dealing with an authorized debt collector.
Debt collectors understand that not all debtors can pay their monetary obligations right away, especially during the pandemic when many have been losing their jobs. They are willing to help mediate and negotiate loan repayment plans with you.
if you’ve renegotiated your loan repayment plans, but you still can’t settle the debt, you can try other alternatives like credit counseling and filing for bankruptcy.
Credit counseling provides consumers with guidance on consumer credit, money management, debt management, and budgeting. Although it may seem like the worst-case scenario, filing for bankruptcy may help you be free of your obligations.
As a debtor, you are protected by Singapore’s laws, like the Protection from Harassment Act. In case debt collectors violate these laws, you can call the police. You can also seek legal relief, such as filing a complaint and getting a protection order.
In conclusion, you shouldn’t evade debt collectors to avoid unnecessary embarrassment. Instead, you should coordinate with them and try to negotiate your repayment plan. However, be aware of what they can or cannot do to know how to deal with them properly.
It’s also important to pay your debts on time, not only to avoid paying for penalties and interests but also to avoid debt collectors altogether. If you’re stuck in a financial crisis, you should check out 1 Fullerton Credit to apply for their financing options.