When a recovery agent knocks on your door know your rights before you panic

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Having recovery agent visit you right in your doorstep may already give you shivers, especially if you have been worrying over late payments of your EMIs or credit card dues already. The fear lies in not having any knowledge as to what they can and cannot do to you. The bright side, though, is the fact that to protect the consumers, there are rules set by the Reserve Bank of India.

The critical thing here is that recovery agents do not have any particular powers over you. They are not police, and they cannot enter your premises by force. You have the right to talk politely to them, ask them whose services they represent, and ask for identification. The guidelines issued by RBI state that recovery agents must possess valid ID as well as authorization issued by the bank or NBFC whom they represent. If not, you have every right to disassociate yourself.

According to RBI guidelines, the timing of calling borrowers is strictly between 8 am and 7 pm. If someone calls a borrower early morning or late in the night, that is an offence. Visiting again and again, calling, and harassing are also not permitted. You can be a defaulting borrower, but dignity and privacy are not negotiable, according to RBI guidelines.

Recovery agents must communicate with respect. They should never threaten you, curse at you, or embarrass you in front of relatives or neighbours. They should not inform others within the same household regarding your borrowing details without seeking prior consent. They should never embarrass you in public despite the fact that it has continued to happen to some extent.

If you are not comfortable with home visits, you can request a lender to communicate with you through written means or through proper channels. The banks are supposed to offer information about the amount due, a breakup of the amount due, and available means through which a repayment can be made. You can request a loan officer to explain the amount owed and for what reason, rather than being forced to pay a random amount due.

When the recovery agent oversteps the boundary, you should record all the details. This involves the date, time, names, and the dialogue. You can begin by complaining to the bank itself, since the latter is liable for the behaviour of its agents. You can complain to the RBI Banking Ombudsman if the problem is not settled. Most debtors fail to recognize that complaints documented by evidence are taken seriously.

Whatever the reason, doing nothing to resolve the problem is never a good solution. It may help to talk to the bank for rescheduling or reduction in EMI or temporary waiver. The banks are always ready to negotiate since something is always better than nothing. It might help to pay only 50 percent or 10 percent through a debt repayment scheme of Rs. 5,000 or Rs. 10,000 per month.

Ultimately, having debts does not take away from your rights. This is because guidelines from RBI ensure that the recovery process is done in a legal and humane manner. It is empowering to be aware of the guidelines when the recovery agent turns up unexpectedly at your doorstep.