Regulating loan recovery

In an earlier post, Mansoor highlighted the issue of banks using brute force to recover consumer bank loans and leased cars from defaulters. The Banking Ombudsman, in its second annual report, has finally brought this to the attention of the State Bank of Pakistan. In the report, SBP has been directed to to regulate private loan recovery agencies that are found to use crude and ruthless tactics and against whom the complaints from small borrowers are increasing.

It is yet to be seen if the “Fair Debt Collection Practices Act” suggested in the report brings any relief to the consumers who was earlier exploited by commercial banks by alluring them towards consumer finance knowing well that the loan cannot be recovered.

5 Comments so far

  1. Inspirex (unregistered) on May 6th, 2007 @ 9:22 pm

    Banks should also learn correspondence manners when speaking to customers. I personally have seen many cases where banks have violated the privacy of their customers, by calling their homes and telling their relatives about the amount due. When enquired why it was disclosed, the bank representative say we told it to family members, who should be knowing.
    Its insane!

  2. Bad credit loans (unregistered) on May 6th, 2007 @ 9:26 pm

    Ok so the tactics are cheap but lenders have to get their money back. Borrowers should make sure they pay back the loans they have acquired on time and swiftly. I am in no way related to any bank or lending institute here in Pakistan but I do know that when you have taken a loan, you have a responsiblity to pay it back on time. Period

  3. Inspirex (unregistered) on May 7th, 2007 @ 12:49 am

    Agreed. The responsibility is there. But when someone defaults, decent action is to be taken. Not holiganism. And in certain cases, even people with perfect payment history are harassed even before a delay has occured. I personally had to tell a lady at one of the banks that the late payment fee and additional charges are my responsibility. Not the banks.

  4. Jamal Shamsi (unregistered) on May 7th, 2007 @ 4:48 pm

    They are ruthless, manner less and shameless – Thats what they are trained for with the card holders, car owners and the borrowers.

    They disclose all details to anyone who is available on phone and with no sympathy they confirm the address to visit in late hours of the evening.

    This happened to ME – when my neighbor who leased a Honda City Maroon color in September 2005 and after March 2006 he failed to pay 2 installments ON time due to his job switchover – April 7th 2006 1030 at night a team of 4 guys came in with a private security company van, rang the bell of my HOME, identified a WHITE un registered Honda City and wanted to tow it away.

    With a GUN in hand and doberman in leash my watchman hold them up bumped the hooter and there comes the whole neighborhood.

    Quiet sarcastically they started talking loud about how the car owner defaulted blah blah blah and before they calling, in comes 1 5 Madadgar, started probing.

    Then came the details – name address car color regn number etc etc, –

    The difference – of alphabet in house number in their papers. BUT they got excited with a un reg new car available to TOW away.

    Turned out to be my neighbor who was stunned by the all hue n cry. fortunately, his car was not not available at home.

    The best part – :) [don’t throw flames at me]

    We photographed and got bank’s IDs from all of Recovery team, security guards were spared as advised by the police van incharge., and we managed to hold their Suzuki cultus in our lane, told them to get lost come back with someone responsible to apologise to my elders, if they want the car back.

    We gave car keys to Police walas who were happy to grab the buggers by balls., because the car does not have the papers as well.

    2 days later one former Lt.Col incharge of recovery cell of the bank came in and gave us a apology letter and asked us accompany him in order to get the car released which was driven away as NA MALOOM GARI parked in street – withheld by the area police station on OUR complaint and he was unable to pull proper strings to get the car without a written apology.

    End of story – BUT the insult my neighbor had, the humiliation few young burger boys throw at him ‘lease wala aya lease wala’ despite that Honda is gone, with his new job he now drives a Cultus. he is now known as Lease Wala uncle


  5. Lisa Tucker (unregistered) on May 24th, 2007 @ 8:12 am

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