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How to deal with harassment by loan recovery agents and file complaint

The responsibility of recovery agents and their actions also lies with the banks, NBFCs and Fintech, as per the RBI.

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In the recent past, the Reserve Bank of India has taken note of the rising incidents of harassment by recovery agents. After the moratorium was lifted after COVID, banks and non-banking financial institutions were under a lot of stress, which increased pressure on recovery agents. As a result, many of these agents began resorting to unacceptable practices.  

The RBI has now issued guidelines to prevent harassment of people at the hands of recovery agents. The responsibility of recovery agents and their actions also lies with the banks, NBFCs and Fintech, as per the RBI. It has also advised that the REs should ensure that agents do not intimidate or harass, verbally or physically, borrowers during debt collection. They should not take any action with the intention of humiliating borrowers publicly or indulging in the invasion of privacy.

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Recovery agents are not allowed to send any inappropriate messages on phones or social media. They cannot threaten them, and recovery calls should be made between 8 am and 7 pm only.  

Despite these guidelines in place, people continue to become victims of harassment by the agents due to the lack of awareness about their rights. 

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Here are some things that borrowers must know if they are defaulting on payments and agents are trying to connect with them: 

*If the agent is harassing you, keep track of all calls, emails, and SMS from the recovery agent. This will help you to document the harassment and prove that it is happening.

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*For immediate relief, you can go to the police station and file a complaint. This must be the first step before taking more drastic action. If the police do not provide any assistance or do not register the complaint, the client can file a civil injunction in court for interim relief against the bank and seek compensation for abuse.

*You can also approach your loan officer or lender with all the evidence and present it to them. It is highly likely that the lender will take prompt and appropriate action against their recovery agent, and all such harassment will stop.

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*If the harassment still continues, the borrower must write/email the RBI and explain the complete situation. The RBI’s Circular for Loans and Advances very strictly states that the complaints received by the Reserve Bank about violating guidelines and adoption of abusive practices followed by banks’ recovery agents are taken seriously. The Reserve Bank can ban the bank from engaging recovery agents in a particular area. In case of persistent breach of guidelines, the RBI may consider extending the period of the ban or the area of the ban. However, it must be noted that the RBI does take stringent action against genuine complaints.

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*Suppose the recovery agent did anything to defame you, such as contacting your friends and family for recovery of dues or creating a ruckus at your place of work or in front of neighbours. In that case, you have the right to file a defamation suit against the bank and its agent. Similarly, if the recovery agent has trespassed on your property without your permission, you can file a trespassing suit against them too.

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