If you’re dealing with persistent harassment from Non-Banking Financial Companies (NBFCs) or other financial institutions regarding loan repayment or debt collection, you have several legal and practical options to protect yourself. Here’s what you need to know:
- Know Your Rights under the Law
India has specific laws and regulations that protect consumers from unfair debt collection practices:
- RBI Guidelines: The Reserve Bank of India (RBI) regulates NBFCs and banks to ensure they follow fair practices in debt recovery. Harassment by NBFCs can include threatening calls, abusive language, or even unauthorized visits to your home. These practices are illegal under RBI guidelines.
- Fair Practices Code: NBFCs are required to follow a Fair Practices Code when dealing with borrowers. This code ensures that the collection process is transparent and devoid of harassment.
- Indian Penal Code (IPC): Harassing calls, threatening language, and abusive behavior can be reported as a criminal offense under the IPC.
- File a Complaint with the NBFC or Bank
First, try resolving the issue directly by filing a complaint with the customer grievance department of the NBFC or bank involved. Every financial institution is required to have a grievance redressal system.
- Grievance Redressal Officer: Contact the Grievance Redressal Officer of the NBFC. The officer’s details should be available on the NBFC’s website or on your loan documents.
- Time to Respond: The NBFC or bank typically has a specified time period, such as 30 days, to respond to your complaint.
- Escalate to the RBI’s Ombudsman
If the NBFC or bank does not resolve your complaint within the specified period or if you are not satisfied with the response, you can escalate the issue to the RBI’s Ombudsman for NBFCs. The Ombudsman can mediate and, in some cases, order compensation for any harm caused by harassment.
- How to File a Complaint: You can file a complaint with the Ombudsman online or offline, with clear details of your grievances.
- File a Police Complaint for Harassment
If the NBFC or its agents are using abusive, threatening, or unlawful methods to collect the debt, you can lodge a First Information Report (FIR) at your local police station.
- Criminal Intimidation: Sections 503 and 506 of the Indian Penal Code (IPC) deal with criminal intimidation, which can be applied in cases of threatening calls.
- Abuse and Harassment: Sections dealing with abusive behavior and harassment can also be used if the agents are acting outside the law.
- Consumer Forum
You can file a case in a Consumer Forum under the Consumer Protection Act, 2019, if the NBFC engages in unfair practices or if they violate your consumer rights. You can claim compensation for mental agony and any financial losses due to their actions.
- Filing a Complaint: Consumer forums provide an easier, less formal legal process, and decisions are usually quicker compared to regular courts.
- Cease and Desist Notice
You can send a Cease and Desist notice through a lawyer to the NBFC or collection agency demanding they stop harassment. A legal notice often makes companies reconsider their tactics.
- Debt Consolidation or Restructuring
If you’re facing genuine financial hardship, discuss options like debt consolidation or loan restructuring with your lender. This can provide relief by reducing monthly payments or extending the loan term.
- Civil Court
If harassment continues, you can also approach a civil court to seek an injunction order to stop the harassment and claim damages for mental trauma or loss of reputation.
- Tips to Handle Harassment
- Document Everything: Keep detailed records of phone calls, messages, and visits. This will help you if you need to take legal action.
- Don’t Ignore the Issue: Ignoring the debt will only escalate the problem. Communicate with the lender and explore alternative payment arrangements.
- Stay Calm and Professional: Avoid retaliating or engaging in abusive communication, as this may weaken your case.
Conclusion
Harassment from NBFCs can be distressing, but you have legal recourse. From filing complaints with the NBFC to seeking legal action through the RBI or consumer forums, knowing your rights can protect you from unfair treatment. Always consult with a legal expert if the situation worsens.
Get in touch with us today at bankharassment.com and embark on your path to financial freedom
