Debt collectors aren’t there to make things difficult for debtors. They can even help you negotiate repayment plans.
In a festive nod to the Chinese New Year holidays, one of the debt collectors from Fast Debt Recovery Specialist Pte Ltd donned his cai shen ye costume while doing his rounds. As hilarious as that might have been, there’s more than meets the eye when it comes to debt collectors and the many assumptions that people make about debt collectors.
Ready to feed yourself with knowledge on the fascinating truths surrounding debt collectors in Singapore? Read on.
1. Debt collectors are not loan sharks
We don’t blame you for thinking debt collectors and loan sharks or loan shark runners are all the same. After all, debt collectors often happen to be big-boned, burly, and rightfully intimidating in stature.
In fact, debt collectors from legal debt collection agencies in Singapore have nothing to do with loan sharks or even money lending businesses in general.
These debt collectors are the middlemen engaged to help corporations, businesses and individuals claw back money owed by their debtors. Debt collection agencies and their debt collectors typically take a cut on the amount recovered as commission in addition to an upfront fee.
2. Debt collectors can help recover debts owed by friends and family
Discerning debt collectors don’t just accept any job. For businesses and corporations, outstanding invoices owed must be produced. For personal debts owed by friends and family, an IOU or at least a text conversation must be furnished. Professional debt collection agencies need proof of debt before they would pursue a claim on your behalf.
In other words, you can engage a debt collection agency to recover the debt if that persistently irresponsible friend or relative of yours owes you money but refuses to pay up as promised.
However, take note that the IOU or text conversation confirming the debt is subject to a statute of limitations — it is only effective within six years of the stated agreed repayment date.
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3. Debt collectors aren’t allowed to harass debtors – and more
Many aren’t aware of this but legal debt collection agencies and their debt collectors are required to follow a Code of Conduct established by the Credit Collection Association of Singapore (CCAS). While it isn’t a law per se, professional debt collectors try their best to do their job while remaining ethical and law abiding.
Here’s a quick rundown of the common things debt collectors are not allowed to do:
- Cause harassment, alarm or distress
- Congregate in groups of five or more when carrying out debt collection duties
- Use threatening, abusive or insulting words or behaviour
- Use actual violence
- Threaten violence
- Vandalise or damage debtors’ property or belongings
- Unlawful stalking (e.g. loitering near debtors’ residence, following where debtors go)
- Impersonate government bodies
4. Debt collectors can help you negotiate repayment plans
This may sound like a plot twist but you read it right: debt collectors can help mediate and negotiate loan repayment plans. As the middlemen, the most ideal situation would be one where the debtor is willing and able to repay all the money owed amicably, no questions asked.
As life would have it, debtors may be unable to make full payments simply because they don’t have the funds on hand. We all know how Covid-19 has caused so many to lose their jobs or get their salaries cut. Debtors may simply not be in the position to pay up all they’ve owed.
This is where debt collectors shine the brightest. Instead of mindlessly squeezing impossible payments out of them, debt collectors can mediate and negotiate loan repayment plans on behalf of the debtors. A small discount or an instalment plan might just be the win-win solution for the one owing money as well as the one trying to recover their money.
5. Some debt collectors are very civil and empathetic
While the stigma about debt collectors harassing debtors doesn’t seem like it would disappear anytime soon, it is important to recognise that not all debt collectors are threatening, intimidating and unethical.
Just to put things into perspective, some debt collection agencies pride themselves on being empathetic, ethical and civil — even if it means taking on fewer clients as they reject those that insist on using threatening tactics. Sticking to their conscience and values also means that they make less revenue.
Remember the debt collector in cai shen ye costume we mentioned earlier on in the article? He even left an auspicious Chinese New Year bag filled with goodies and an angbao, just because!
ALSO READ: Don’t forget to pay up: Debt collector disguised as God of Fortune goes knocking on doors
The often negative assumptions people make about debt collectors are uncalled for. What many of us aren’t aware of is that some debtors actually treat civil debt collectors in non-civil manners like shouting, threatening, brandishing weapons, splashing water and even calling the cops when they’re the ones not dealing with their debt.
The bad news is that debtors can’t hide forever. If you currently owe money, all’s not lost as long as you take steps to better manage your debt and start paying down your debt as soon as possible.
This article was first published in SingSaver.com.sg.