India 360: When the loan sharks come home

Days after the RBI gave warning to banks to stop using recovery agents with strong arm tactics to recover money the State Consumer Disputes Redressal Commission in Delhi has fined the ICICI Bank for harassing a customer.

The Consumer Court has held ICICI Bank guilty of using goons to harass a consumer Tapan Bose and his friend’s son Vinod Chowdhary. Vinod was admitted to hospital after ICICI recovery agents physically attacked him in January this year. He was driving Bose’s car that was bought on a car loan through the bank.

The State Consumer Court has directed ICICI Bank to pay a fine of Rs 55 lakh and also return every loan installment paid by Bose so far.

But the Bank clearly is not amused as spokesman, Charuddatta Deshpande says, “The agencies are defamed and that is why they are called goons. So the whole approach to default would be encouraged and that would be very detrimental to the industry. We do about eight to 10 million calls a month and we take a serious cognizance of any aberration.”

In another case of harassment by ICICI bank agents, Jowett D'souza of Goa was roughed him because after making 26 on-time installments of the car loan D'souza had failed to pay two because he had run into financial trouble.

India 360 brought up the issue of recovery agents harassing consumers who failed to pay the loan rising limitlessly. The show also allowed viewers to relate their experiences that they had of recovery agents harassing them.

On the panel to tackle the issue was Chairman, Consumer VOICE, Bejon Mishra who also answered the viewers’ queries about handling the recovery agents.

Nupur Khare, Mumbai: I have an account at the HSBC Bank and also a credit card. They withdrew money from my account when I was not in the country against my credit card without informing. My money in account had EMI payments to other accounts so the checks had bounced. When I came home I had to pay a big amount to the checks bouncing. When I asked HSBC to allow me to return the payments in small parts they refused. They sent recovery agents to my home and I was not at home.

So what is it that empowers banks to pull out money from the consumers’ account without even informing them and asking for their consent?

Mishra said that banks have no authority to so that and there was no legal provision that allowed them to so such thing. “The banks do it because in our country even the policy makers and the regulators are not sensitive towards the consumers and because of this apathy that exists. The complete system gets derailed by the service providers,” said Mishra.

After the crackdown by he RBI, the ICICI spokesperson had said that the act was only a way of encouraging defaulters. The problem lies in the fact that loans are given indiscriminately and the agents hound you to buy credit cards if you want to but it or not.

“They never look into it in terms of the code of conduct and in terms of best business practices, which is observed all over the world in the financial institutions. Unfortunately in our country the banking service has become so proactive because of severe competition between the public sector banks and private sector banks. They are competing to woo the customers and the regulator is sitting tight and watching the fun,” said Mishra.

Jowett D’souza related on the show how ICICI agents to recover had roughed him when he had failed to pay his car loan.

“It has been 28 months since I have registered an offence. No arrests have been made till date. I used to get massive threats and even after filing a compliant the police have failed to take action,” said D’souza.

So is the local police working hand in glove with the recovery agents?

“It is true because what we find is that complete machinery which is supposed to be working in favour of the consumer is working against the consumer. The mechanism is working in favour of the people. There is an industry there which helps the mechanism and instead of working for the protection of the citizen and get favours from the service providers and keep the consumer always at lurch,” said Mishra.

So what will the bank do to a consumer who is repeatedly defaulting on the loan?

“If a consumer is defaulting then there must be a genuine reason and we need to look at those reasons and be able to enable the consumer to come out of the death trap. What we try to tell the bank is that instead of having recovery agents they should recruit skilled, counseling agents who should be able to counsel the consumer to be able to come out of the death trap and lead a very comfortable and a happy life,” said Mishra.

D’souza said that he had defaulted on two loans of his and the bank had not even sent him a notice. “They have forged my signature and said that they have sent me a notice,” said D’souza.

Dr Suparna Ghosh, Kolkata: I have a loan from ICIC Bank and there was no problem. They have an understanding with my SBI account and there was a problem with the two banks and the ICICI goons were after me for about 25 days ins pite of me going to the ICICI people and telling them that I had paid showing them by pass book.

Why do the banks not take the customer to court and use muscle power instead?

“The consumer has to make sure that they initiate action against such culprits as they are criminals in the society. Action has to be taken against them. The whole system is so lethargic and so anti-consumer that the consumer never finds it friendly to go for help,” said Mishra.

So what can one do if the recovery agents come harass you?

Mishra said that one needs to put a complaint strongly to the bank mainly the Chairman of the Bank. “You also have to make sure that you have all evidences in your favour so you are not looked at as a defaulter or violating a law so you must have all your evidences in place and the last thing is that if no body listens to you then you need to go to the consumer court so seek relief,” said Mishra.

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