A Recovery agency is usually a third-party agency, appointed by a bank to collect customer's loan dues for a fee or a percentage of the total amount owed. Recovery agencies usually follow businesses and customers to recover the money for banks.
In India, many people are scared of recovery agents, because of their high-handed nature and illegal ways of collecting money on behalf of banks. There are many instances of recovery agents threatening loan defaulters. In a shocking incident, a Mumbai resident who had taken a Rs 50,000 personal loan, committed suicide, accusing a recovery agent for his death.
Even though a recovery agent has to collect dues on behalf of a bank, there are certain things which he is not supposed to do, during the recovery process. We will discuss the various things which recovery agents can’t do. In case you have defaulted on the loan, you need to be aware of them.
As per rules, a recovery agent is not allowed to violate your privacy. That means he cannot discuss the loan with your employers or neighbors. In case he indulges in this, you have all the right to file a complaint against the recovery agent.
Whenever a recovery agent comes to you to collect the money, you must not forget to check his identity. Every recovery agent must have a card issued by the bank or by the authority of the bank. They can't refuse to show this identity.
Recovery agents have no right to use abusive language while collecting pending dues on behalf of banks. Even though they are collecting pending dues, they have to treat you with respect.
As per rules, a recovery agent is allowed to contact you, only between 7 AM and 7 PM. They have no right to contact you at odd hours like very early in the morning or late at night. If you are working in shifts, you can ask agents to call you, at an appropriate time. If a close relative has expired in the family, you can ask the agent not to contact you for a few days.
If a recovery agent is crossing his limits and if you are being harassed by him, you have all the right to file a complaint. You must first contact the respective bank branch and inform them regarding the issue. If they do not respond, you can file a police complaint.
If you do not want to file a police complaint, you can contact the banking ombudsman. As there were many complaints against the recovery agents regarding behavior during the recovery process, banking ombudsman allows customers to file a complaint with them. The Banking Ombudsman was introduced for the purpose of resolving banking issues posted by customers.