Dealing with financial organizations such as Non-Banking Financial Companies (NBFCs) or banks can be unpleasant, especially if you are unable to pay your loans on time. If the situation worsens, some borrowers may face harassment from recovery agencies. While these organizations have the authority to recover their debts, rigorous restrictions are in place to prohibit unethical or abusive collection activities. If you are being harassed by NBFCs or banks, here is a quick guidance on how to protect yourself and deal with the matter efficiently.
Why does harassment occur?
Harassment by NBFCs and banks usually occurs when borrowers miss their equated monthly installments (EMIs) or default on loans. Recovery agents hired by these organizations may use excessive phone calls, threats, and unethical recovery practices in order to collect the debts. However, such methods are illegal, and borrowers have the right to seek redress.
Steps to Take If You Are Being Harassed.
- Know your rights: The Reserve Bank of India (RBI) has issued explicit instructions to prevent harassment by recovery agents. Recovery Agents:
- Call only between 8 a.m. and 7 p.m.
- Should not use harsh or threatening language.
- They are not permitted to publicly embarrass you by contacting relatives, friends, or colleagues.
- Must respect your privacy and not enter your home or business without authorization.
If any of these regulations are broken, you have reason to register a complaint.
2. Document Harassment: If you are being harassed, start documenting every interaction. Keep records of:
- Dates and times for phone calls.
- The nature of the talk, particularly if threats or harsh words were used.
- Recovery agents sent you messages or emails.
This documentation will be critical evidence if you decide to register a complaint with thelender or pursue legal action.
3. File a complaint with the bank or NBFC: The initial step should be to contact the bank or NBFC’s customer grievance cell. Most financial institutions have a systematic mechanism for handling consumer complaints. Submit your complaint in writing, with all documented evidence.
4. Take the issue to the Banking Ombudsman: If the bank or NBFC fails to resolve your complaint satisfactorily, you can take the matter to the Banking Ombudsman. This is a free service provided by the RBI to settle disputes between clients and financial institutions. The Ombudsman can look into your matter and direct the bank or NBFC to take corrective action if necessary.
5. Contact Consumer Protection Bodies: If your problem remains unsolved, consider contacting a consumer protection forum. Consumer courts investigate disputes involving unfair practices, including harassment by recovery agents. A legal notification can be issued to the bank or NBFC, holding them responsible for unethical recovery activities.
6. Consult with a legal professional: In extreme circumstances when harassment persists despite complaints, contact a consumer or financial law attorney. A legal specialist can walk you through the steps of taking the financial institution to court for violating your rights. You may also be able to seek compensation for mental harassment and inconvenience.
7. Communicate with your lender: If you are truly experiencing financial troubles, it is always best to contact your bank or NBFC before the situation worsens. Most lenders provide options like this:
- Loan Restructuring: Change the loan terms to make payments more manageable.
- Moratorium Period: A brief suspension of loan repayments to assist you achieve financial security.
Being proactive and open about your circumstance allows you to avoid extreme recovery actions entirely.
How To Avoid Future Harassment
To avoid situations that may lead to harassment, consider the following:
- Budget and Plans: Borrow within your financial means and develop a repayment plan that meets your budget.
- Set up Automatic Debits: Automate EMI payments to avoid missed deadlines.
- Monitor Your Loans: Regularly review your loan accounts and CIBIL score to ensure that everything is in order.
Conclusion
Harassment by NBFCs and banks is illegal, and borrowers have many legal options to defend themselves. If you are being targeted, knowing your rights, documenting the harassment, and reporting it to higher authorities can help you resolve the matter effectively. By taking prompt action and speaking with your lender, you can avoid the tension and mental strain caused by unethical recovery methods. Remember that you are legally protected, and there is support available to stop harassment in its tracks.
Get in touch with us today at bankharassment.com and embark on your path to financial freedom
