Corporates hiring ‘legal ah longs’

Debt collecting agencies hired by corporates often employ high-handed tactics to intimidate debtors to pay up.

PETALING JAYA: Why are banks, corporates and credit companies outsourcing debt collections to third parties which harass and intimidate customers into paying up?

This is a question posed by several individuals who spoke to FMT, highlighting the harassment, threats and intimidation faced by them when approached by dubious third parties engaged by creditors to collect debts on their behalf.

In relating his ordeal, Ali, 57 (not his real name) said that his nightmare started when he purchased a car few years back and missed two installments due to financial difficulties.

“Times are tough. With rising cost of living, it gets very difficult to make ends meet,” said Ali, who is a pensioner.

After failing to make the payments, Ali said he received a call from a lady, who claimed to be working for the bank’s legal department.

“Soon after I answered the call, she started throwing tantrums at me and said that I should be responsible enough to pay up my installments,” said Ali.

Irritated by the lady’s crude behaviour, Ali demanded her to produce a bank statement to verify the payments missed.

“But she could not produce the bank statement and asked me to visit the bank instead. Then I questioned how come she has no access to the bank statement if she works for the bank.

“The lady then backed off and stopped calling,” he said.

Ali said that this was not the first time he encountered debt collectors. Back in 1997, he went through the same experience with threats of being blacklisted.

“I encountered the same problem during the economic crisis for late payments of my car installment. The debt collectors came to my house and created a scene.

“My wife was so upset as they were embarrassing us in front of our neighbours,” said Ali.

On whether he lodged a police report on the latest incident, Ali said he did not do so as he feared for his family’s safety.

“What are the police going to do? I just hope that the banks use tact instead of scaremongering to collect debts,” said an irritated Ali.

Defamation

Another victim, Rani, 36, (not her real name) said that she faced the similar problem with debt collectors over a furniture purchased in 2002.

Rani said that she purchased a furniture 12 years ago on her brother’s behalf who later continued with the monthly payments. Nothing was heard from the company until recently.

“Recently several people called me and started issuing threats that they will come to my work place if I don’t settle overdue payments,” said Rani, who is a teacher.

She added that the callers refused to identify themselves and claimed to work for the furniture shop’s legal department.

“I don’t know how they got my phone number and my address. When I asked them to identify themselves, they just refused,” said Rani.

Upset with the matter, Rani firmly told the callers that she would only deal with the furniture shop’s management and refused to engage the unknown callers.

“Just yesterday, the furniture company called me and apologised for the matter, saying it was a misunderstanding. The debt owed was only about RM1,000 and even that was just in late interest payments,” she said.

Rani had since lodged a police report on the matter and alleged that the furniture company was attempting to scare debtors into making payments.

She contemplates taking legal action against the company for harassment and embarrassing her by making frequent calls to her work place.

“If you ask me, I should not be paying them for the troubles I went through. The debt collectors kept harassing me by calling my home and office numerous times,” she said.

“I am thinking of taking legal action on them for defaming me in my work place,” she added.

Banks as good as loan sharks

Another victim, Selvam, 50, (not his real name) said that banks should engage debtors constructively and understand the tough economic times instead of using thugs to harass people.

“There is no need to harass or embarrass people. Use proper channels to deal with overdue payments,” said Selvam, who works as a manager.

Relating his ordeal, he said that he was retrenched several months back as his former employer closed down the business.

Being jobless, Selvam was delayed in making his credit card payments.

“This third party debt collector started to call and harass me every single day. They even threatened to come to my house,” he said.

Nevertheless when he gained employment, Selvam said he approached the Credit Counselling and Debt Management Agency (AKPK) to resolve the matter.

“Once I finished making payments, I threw my credit cards at the bank’s counter,” he said.

When asked if he had lodged a police report on the matter, Selvam replied it was a waste of time, adding that the authorities did nothing to help him when he got into trouble with loan sharks some time back too.

“As far as I am concerned, banks are nothing more than licensed loan sharks,” he said.