Sometimes some individuals who engage in debt collection activities with financial institutions exceed the legal limits that are allowed for that activity.
10 min read
The opinions of the employees of You are personal.
Given the economic and financial hardship, many people find themselves in the painful position of being unable to continue normal payments on their outstanding loans due to job losses or reduced income from their businesses. People with credit cards, personal loans Banks and / or finance companies, auto loans, and business loans that have never missed a single payment in their lives are now faced with the debts and their respective collections.
It goes without saying for any financial institution that sees delays Payments of your granted loans Try to collect overdue fees and never endorse the “non-payment” culture. Occasionally, however, some individuals who engage in debt collection activities with financial institutions exceed the legal limits that are permitted to carry out that activity despite violating the same internal guidelines of financial institutions or banks. This article will walk you through how to receive a call or visit to collect in this situation.
Have pencil and paper and a video camera ready in case you are a visitor (your phone is perfect).
At the beginning
- Remember to write everything down.
- You’ll need to ask the collection agency to identify themselves with their full name and that of the financial company, bank, or debt collection agency they work for. Ask for ID and snap a picture of it when you visit your home or work.
- Ask for the phone number and address of the office where you can reach them.
- Ask for the email address and phone number of the financial institution’s administrative unit that is responsible for receiving complaints about bad debt collection practices.
If the capture agent refuses to give you this information and to follow this protocol, you can simply explain that you can end the call because it has not been properly identified. If it’s a visit, record it and politely feel free to not continue the conversation.
If during his visit the debt collection agency gets rude, insulted or threatened you because you did not want to visit him because he did not provide you with all the information, you can call for a patrol at that moment because they are disturbing you at your home (You will see how quickly it goes away).
If the debt collection agency identifies itself correctly and provides you with all the information, you can let it begin with its administration until then. If you have followed the previous protocol correctly, it will ensure that the collection manager is following the rules of a legal process and complying with the collection’s code of ethics. This means that you are fully identified and can be sanctioned by filing a complaint with the Debt collection agency (REDECO) of National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF). Here is the link.
When you start debt collection management, you will need to receive the amount that you can update and / or the total outstanding balance, as well as the timing of the default. In general, you will be asked why the delay is due and whether you have the money to pay off or adjust your balance the same day.
If you don’t have the money, they’ll offer you some payment alternatives, if any, and it depends so much on you, the debt collection manager, and the policies of the bank or finance company in question which arrangement can be made.
If it is a visit, they will notify you in writing and say goodbye. Try to NEVER Sign a document you don’t understand.
Regardless of whether you have to regulate, not pay or make an agreement, the next visits or calls will follow.
NEVER try to sign a document that you do not understand / picture: Scott Graham on Unsplash
Now what should collection agents do and what not?
- Address the debtor respectfully and politely
- Communicate or appear on a schedule from 7:00 a.m. to 10:00 p.m. depending on the hours the debtor is in.
- Document the payment agreement in writing with the debtor, if any, and specify the terms.
- Handle personal data in accordance with applicable regulations.
- You cannot receive cash payments or deposits into personal accounts. A deposit must be made directly by the debtor on his credit number in the bank branch or the corresponding financial branch.
- Use names or designations that are similar to those of public institutions.
- Use phone numbers that are listed in the caller ID as “confidential”, “hidden”, “private” or with another phrase or similar name that makes identification impossible, as well as numbers other than those registered in the REDECO of CONDUSEF.
- Threaten, insult, or intimidate the debtor, their relatives, employees, or any other unrelated person.
- Conduct third party debt collection procedures, including personal references and beneficiaries, other than joint and several debtors or endorsements. The information provided in this section does not apply in the event of a first contact, the purpose of which is to inform the debtors of the identification and contact information of the collection points.
- Submit documents that appear as judicial writings or represent a representative of a jurisdiction or agency.
- Set up special registers that are different from the ones already in place, blacklists, posters or announcements that publicize the debtors’ refusal to pay.
- Conduct debt collection, negotiation or restructuring procedures with minors or older adults, unless in the latter case it is the debtors.
- Conduct debt collection, negotiation, or restructuring procedures for any credit, loan, or financing at an address, phone, or email address other than that specified, jointly committed, or approved by the financial institution or debtor.
What about a victim of improper extrajudicial collection?
Before REDECO there are 22 reasons to assert abuse by collectors.
- Threaten, insult, or intimidate the debtor, family member, co-worker, or any other person unrelated to the guilt.
- Submit documents that appear as judicial writings or represent a representative of a court or government agency.
- Special registers will be set up, different from the existing ones, blacklists, posters or announcements that the debtors refuse to make public.
- Collection management with abuse and criminal offenses.
- Collection management for credits that have already been paid.
- Collection management without user, customer and / or debtor partner.
- I carry out debt collection, negotiation or restructuring procedures at an address other than the address given by the debtor, co-debtor or guarantor.
- I do not provide the finance company with the documents containing the payment agreement, negotiation or restructuring of the credit, loan or financing.
- There was no written document about the payment arrangement, negotiation or restructuring of the credit, loan or financing.
- I do not provide the name, title, or company name of the collection agency and the person who made the collection.
- He did not provide the contact details of the collection agency and the persons responsible for the collection
- He did not mention the contract or the operational reason for the debt on which the collection operation is based
- He did not mention the address, email address, and phone number of the financial institution’s administrative unit that is responsible for receiving complaints about bad debt collection practices.
- He did not mention the amount of the debt, the date of calculation and the conditions for paying the debt.
- No mention was made of the financial company that provided the loan, loan, or financing
- He was not approached politely or respectfully.
- Conduct third party debt collection procedures, including personal references and beneficiaries (excluding joint debtors or guarantees).
- Execution of debt collection, negotiation or restructuring procedures at a different address than that specified by the debtor, jointly obligated or guarantor.
- Receive payment of the debt any way and directly.
- They communicated at a time outside of the set times (7:00 a.m. to 10:00 p.m.).
- Use a name or designation that is similar to a public institution.
- Use phone numbers that make identification impossible
Of the 22 reasons for the assertion of abuse by collectors before REDECO, only numbers 1, 2, 4 and 21 are reasons for imprisonment and fines for the offending collector since the publication of the reforms of federal criminal law in April 2017 as part of the financial reform, the sentences of 1 to 4 years in prison and fines of 50,000 to 300,000 pesos for those who engage in illegal extrajudicial debt collection activities.
As always, the best solution is to take responsibility for the credit we request, read the contracts carefully before signing them so as not to lapse into overly expensive credit, and try to make savings for emergencies when we get down to business have to deal with a loan that we do not consider necessary to take on predatory loans, and only when there is no more choice is it also part of financial literacy to face a debt.