Personal Loans

What Can Debt Collectors in Singapore Legally Do and How do You Deal With Them?

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Joanne Poh

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The classic images of a pig’s head and O$P$ splattered in red on corridor walls sum up Singaporeans’ feelings about debt collectors. While legitimate debt collection agencies might not be using these loanshark runners’ tactics, some of their actions can still border on harassment. If you’ve had trouble paying your bills, you might be the recipient of unwanted attention from a debt collector.  Here’s what you need to know.

 

Who are they?

Companies can lose huge amounts of money each year to non-paying clients. It is therefore in their best interests to invest in a means of clawing back the money owed to them. Most of the time, this unpleasant task is outsourced to debt collection agencies, who work on behalf of the company to chase debtors for the money owing. For instance, if you don’t pay your credit card bills, the bank is likely to engage a debt collection agency to get the money back.

 

What can they do?

There is a reason legitimate debt collection agencies don’t run around sticking pigs’ heads on people’s doors—it’s illegal. But that hasn’t stopped many debt collectors from resorting to scare tactics that might include banging on your windows and doors and hanging up banners telling the world that you owe money.

What sets them apart from your neighbourhood ah long is the fact that they try to comply with the law. There’s also an industry Code of Ethics set up by the Credit Collection Association of Singapore, which resolves disputes between debtors and collection agencies; however, the CCAS does not have a great deal of power to enforce the code.

 

What can’t they do?

Unfortunately for debtors, there is no specific law regulating debt collection agencies. This means that they’re basically allowed to do anything a regular entity can and are subject to the same laws as a friend you borrowed money from would be.

Still, it’s often necessary to scrutinise the actions of a debt collector who’s on your tail to ensure he doesn’t do anything illegal. Here are some examples of actions that could get a debt collector in trouble with the law.

  • Unlawful assembly – If the debt collection agency sends down a mob of angry, burly men, you might be able to call the police on them for unlawful assembly. Any assembly of five or more people can be convicted if you can show that their objective is to commit an offence, including using criminal force to take any of your property, vandalising your property or putting you under threat of physical harm. Earlier this year, a group of seven debt collection agency employees was arrested for unlawful assembly after showing up at a food court stall at Funan DigitaLife Mall.
  • Intimidation and violence  – While banging on doors and shouting vulgarities are standard debt collection practices, it is actually against the law to use threatening, abusive or insulting words or behaviour with the aim of causing alarm to you or causing you to believe that immediate unlawful violence will be used against you or another person. So if a debt collector waves his fist in your face and threatens to punch you, call the police.
  • Vandalism – We all know what happened to Michael Fay. If the debt collectors spray paint your property, affix on your property any posters, advertisements or banners or steal, destroy or damage anything belonging to you, they are guilty of an act of vandalism.
  • Harassment – Causing harassment, alarm or distress to you by using threatening, abusive or insulting words or behaviour or making any threatening, abusive or insulting communication can amount to harassment. If their actions cause you to believe that unlawful violence will be used against you or they manage to provoke actual violence, you likewise have a good reason to call the cops.
  • Damaging or taking possession of your belongings – Many debt collectors will try to make you believe they can tow your car away or seize your TV if you don’t pay up. In reality, they need a writ of seizure and sale from the courts in order to seize your property.

 

How to deal with debt collectors

The bad news is that you can run, but you can’t hide. While you might be able to dodge debt collectors in the short term, let your debts spiral out of control and you could soon find your car and other property seized and sold in order to recover your debts, or bankruptcy proceedings commenced against you.

Don’t let yourself be intimidated by debt collectors. If they overstep their limits and do anything that’s against the law, don’t hesitate to call the police. Otherwise, know that they often have the ability to act as an intermediary between you and your creditors.

This means they might be able to negotiate an instalment plan, or in cases where the bank is a creditor, help you to lower your interest rate. Instead of running away, try to bargain with the debt collectors and work with them to devise a manageable way to repay your debts. This can save you a bit of money as well as alleviate the pain of having your case escalated to the court system.

Have you ever had to deal with debt collectors? Share your experiences in the comments!

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Joanne Poh

In my previous life, I was a property lawyer who spent most of my time struggling to get out of bed or stuck in peak hour traffic. These days, as a freelance commercial writer, I work in bed, on the beach, in parks and at cafes, all while being really frugal. I like helping other people save money so they can stop living lives they don't like.

  • bmvjr

    Now i am not in the sad situation to have to deal with debt collectors, however having read this article, i can’t help but leave a remark. So here it is:
    1.) if not imposed on them in the first place, the debt collectors industry should strive to develop, enforce and adhere to some civilized conduct. That should not include what was stated in the article as “common”, such as banging at doors, sending threatening burly guys around, intimidating and what have you. That’s loan shark methods and should be strictly prohibited to licensed debt collectors in the first place. Non compliance should lead to penalties and possible revoking of licenses. This is the 21st century and a civilized country, why should improper conduct be tolerated in the first place?
    2.) the advice to call the police is quite useless. By the time the police arrives, any debt collector who behaved improperly prior to the police arrival will have tuned down his behavior by then and deny any wrong doing. Nothing left for the police officers but take down personal statements and perhaps giving the harassed party the opportunity to file a report. The chance that a party who owes money already will spend money on starting a case, perhaps even involving a law firm is very slim. So this seems a rather mute avenue to recommend.

    My guess is that if licensed debt collectors were trained to approach people who owe in a more cooperative fashion, such as with the intention to help rather than to bully, the collectors chances of recovering money owed may improve somewhat. A person who gets spared the loss of face may be more forthcoming to work out a solution to an owed debt. That requires sitting down and talking to debtors, not intimidating and harassing them.

    Often enough such debtors have been given credit lines, credit cards, credit purchases without a serious check on their actual means. Hunting them down later when the predictable default on payments has occurred is not exactly responsible credit policy.

    • Abee

      What powers do debt collectors or banks have to recover unpaid unsecured credit card and loan debts from non Singaporean’s that have left Singapore?

      • bmvjr

        I don’t know if that is a real, existing problem because banks in Singapore would not provide unsecured loans or unsecured overdraft facilities to Non-Singaporeans in the first place.

        • Abee

          That’s not true – Singapore Banks offer unsecured loans and credit cards to EP Holders (ie non PR and Sinaporeans). The question remains, what powers do debt collectors have to collect debts from debtors who have left Singapore?

          • bmvjr

            A: then banks in Singapore should perhaps not make unsecured credit card and loans available to Non-Singaporeans in the first place.
            B: debt collectors from Singapore have no jurisdiction outside of Singapore, so their hands are tied. However if they know what jurisdiction the debtor resides in after having left Singapore, they could consider to seek cooperation with a debt collector in that country – at a cost of course. That may turn out unattractive as the local debt collector has to part with some share of his commission. Also not every country allows the activity of “debt collection” but requires a party who chases after a debt to adhere to the very specific legal steps and procedures valid in their jurisdiction.

  • Helpless soul

    Help… my spouse help his brother of 30K after we sold our flat.. almost coming to 3yrs till now his brother hv not return our money.. there is no black an white written of iou agreement cause we believe by helping maternal brother who is in trouble. BUT now my spouse in debt of 5k frm different license moneylender which each 500 to 1k frm total of 10 license money lender.. now my spouse hv not enuf money to pay.. especially they charged him qith ridiculos late payment fee..
    Debt colletor kept coming to our house.. with DEMAND OF LETTER pasted on our door. My spouse in misery he left hm for almost 2most. I prayed The Compassion protect him safe and frm harm. He is a kind soul who helped others in trouble.. now he in trouble for not able to pay those debts. Me and my 4 lil children at hm.. every two weeks he will transfer money for our daily needs. Question.. can debt collector harrass our hm by making us embarass around our neighbours?
    I need advise frm any kind soul out there..
    Im worried most with those license money lender.. afraid they will do other “dirty” tactics behind us.. my family safety.

  • bmvjr

    Well, “helpless soul” , first off – you have done everything wrong in this matter that one could do wrongly. No IOU or written agreement of some sort with a person you give the substantial sum of 30K to as a loan? Rather than generosity, that borders on naivety. To make things worse, your spouse entered into transactions with 10 different money lenders for a total of 5K? Let us take a step back and look at this: you gave 30K away as a loan even though you can’t actually afford to do that. Then you turned to 10 different money lenders for small amounts. The fact that only one money lender would not have entertained you more than once did not ring any alarm bells? Ok, enough of the scolding. You are in a difficult situation now and while it will be tough on you and your family to resolve it, it can yet be done – not with borrowing more money from money lenders though!
    1.) stay away from more money lenders!
    2.) debt collectors showing up at your home or contacting you must be entertained, meaning you have to let them in to sit down and work out a way to serve them with installments. Running away, pretending not to be home, not replying to their mail or ignoring their calls will make things worse, nothing else.
    3.) you may consider to contact an organization that helps with consulting on how to handle debts – such organizations exist, google it and call them for an appointment.
    4.) stop blaming your brother-in-law who borrowed the money and didn’t pay it back. The mistake is with you and now you have to deal with it. That does not mean that the money you gave him as a loan is not still owed to you.
    5.) if it was agreed, as you wrote “in front of the rest of the other family members he will return back our money” then you may also consider to get the rest of the other family members together again to confront them with the fact that you did not get your money back but got into difficulties instead. Check how they may be able to help with resolving at least the issues with the money lenders before that piles up to an even bigger amount.
    6.) If it hasn’t happened yet, you may have to consider to step back from the “new flat” that you wanted to use the 30K as deposit for. That is certainly not an expense you can afford while dealing with an outstanding loan of 30K and issues with 10 money lenders.

    I am not an expert on handling debt or even bad debt, this is just some ideas thrown at you and there is more and probably better advice out there for sure. All i can say beyond the points above is that it is not the end of the world. It can be resolved but that requires discipline on your part, some straight thinking (including dismissing money lenders as a solution), some sacrifice for a certain period of time and the firm commitment to get this situation sorted out. You don’t have an IOU from your brother-in-law but there seem to be family members that should be able to come forward as witnesses to the verbal agreement made by your brother-in-law to pay this loan back to you. If they are willing to sign an affidavit to that effect, you may be able to get a legal title of sorts that enables you to start proceedings against your brother-in-law for the recovery of that outstanding loan. Not a pleasant choice, but an option to be considered.

  • Bullying Singaporean

    wow…collectors, as long as collectors watch their words and keep the vulgarity inside themselves. No police enforcer can make any arrest, as long as collectors don’t show their fist. Just keep continuing to call the debtor regularly and make frequent visit to debtor’s home have a chat with the family member till the debtor get irritated and violent, collectors can claimed it is self defence or file a lawsuit against the debtor for involuntarily hurt, extra bonus income.
    When debtor have enough and consider the frequent visit as harassment, which as a collector can claim that they are protecting the customer interest to make regular visit ensuring that the debtor is alive and kicking. it does sound like sure win to be a collector and believe there must be a commission for successful recovery. Resort to debt collector instead of seeking legal action, debt collectors must be more lucrative than begin a lawyer. No need for education just simple English understanding and be a bully.
    Where are the MPs, Ministry of Home Affair, MAS, SPF and any other relevant authorities that are suppose to protect the citizen from uncivilised action, all actions to recover debts by debt collector are consider legal, nobody can stop debt collection, debt collectors are God and above the law, do whatever you can harass, stalk and cause duress to the debtors family till they pay. Hmmmm…..definitely better than ah long chasing? Debt collectors just break the debtors mentally.

  • jen

    I’m late of payment after my company irregular salary payout date & so, after paying others, I default one & when I sms about the lateness, the dc unhappy saying is he supposed to wait like a fool till I pay up. I replied to him, that I never default b4, I know he will surely sms me again but thanks to my company, because of them, I have to pay late charges of $150 of 3days to one company, at the end of the month, I paid all outstanding except this defaulted company, where am I supposed to find $695/- I guess, I have to face the music coz no one, gonna help me out!!!!

    • Shaheed Kolavayal

      DC like to ridicule you and make you scared and shitless. They will ask for more money than you can pay because they get more commission from the company you owe. They will also ask to pay late charges and extra like $50 for every letter.
      Just pay what you can but be sincere. Try $200 per month. Keep the receipt, keep a record of everything. If they come and harrass you and scare you further, ask them – Do you like doing this job making people stressful and and suicidal? A debt collector with a heart will go all out to help you work on a plan YOU CAN HANDLE, not a plan that THEY LIKE. Unfortunately, Singapore DC is all about commission.

  • jen

    It’s been 1wk I didn’t go to work coz I worried, the dc will create a scene either at workplace or home, I don’t want that to happen nor do I want to lose my job but then no one, is helping.. all my sms turn to ashes as coz none reply!!! Today, 4/4.. I still haywired, really don’t know, who to turn to.. Don’t even tell me, how about yr siblings or parent, don’t ever talk about them, anymore!!!

  • jen

    I was refer to counselling centre, it’s just discussion..nothing extra.. have to handle my own self

    • Josephine Koh

      Hi Jen,
      I can refer you to someone that might be able to help.
      Email me and i’ll tell you more

      oct2886@gmail.com

  • bmvjr

    One of the ways to ease the burden while paying your debts back is to do it in installments. Example: you have 5 different parties you owe money to. Do not pay the full amount back to 3 or 4 parties ending up not having enough left to serve the remaining party. Look at what money you have available to pay back and then make partial payment to all 5 parties.
    Say you owe S$ 100 to party 1, S$ 200 to party 2, S$ 100 to party 3, S$ 200 to party 4 and S$ 60 to party 5. That is a total debt of S$ 660.–. If you have only S$ 500.– available to pay, then
    do not pay any party the full amount but only 75% !
    You pay S$ 75 to party 1, S$ 150 to party 2, S$ 75 to party 3, S$ 150 to party 4 and S$ 45 to party 5. That is a total of S$ 495.– out of the S$ 500 that you had available. Open balance
    remaining is S$ 165.– plus possible interest, late payment charges, etc.

    This way you do something, all parties you owe money to get at least something back, the pressure gets less because they see you are willing to repay the debt, even the interest gets
    smaller – in other words, there is light at the end of the tunnel in sight.

    The amounts vary, the number of parties you owe to may vary, the percentages of what you can pay in installments vary, but the principle described above can be applied to almost any scenario of a person in debt. The important thing is: any party that gets nothing will increase the pressure, add more interest and charges, add to your stress. So do at least as much as you can to all parties and things start to ease up. But you must of course keep doing that until all is settled to prevent things to get worse.

  • Lim Fong

    My negibour got into some debt from a lience money lender in City Plaza. Because of MLS one matter my negibour was imprison for few months . And these money lender engage debt collector to collect debt from him . The 1st time they start to draw on the wall and police was alert but nothing was done . Then later almost every day they will sure come in a group of 3 or 4 at his unit . Banging , shouting , insulting and shouting vulgar words. They even sit infornt his unit blocking the passage way for the neighbours to pass. Because of this it has cause all the neighbours could not rest well especially those with baby . All these harassment was report to police and still nothing was done . Until we negibours take turn call police to stop the nusiance so that the babies could sleep and rest .
    Why police cannot stop them ?
    Is it because they are lience and they can do what they like .
    So what is the difference between lience and no lience ?
    Dun they have a limit in do things ?

    • Shaheed Kolavayal

      You should report this to Monetary Authority of Singapore for the gangster tactics that the licensed moneylender used.
      Becareful when taking loans from licensed money lender because some of the real owners are gangsters and thugs.
      If the police can’t do anything or not doing anything, write to the HQ on why they are not taking actions and ask them if they need to wait until the house is on fire or somebody gets killed before action is taken.

  • Venkatachalam Kasi

    HI My friend got money from License money lenders and got money through credit cards from some banks but now he lost his job and went back to own country. Now he is not in the position to pay all the debts money lenders are threatening him that they will get arrest warrant and you will be arrested. He will get arrested even if he is not in Singapore ?

    • Shaheed Kolavayal

      This is a civil case between a money lender and borrower and between banks and credit card owners. There is no crime here. They can only apply a civil case in the small claims.

      But if he owes his divorced wife alimony and monthly maintenance support, then yes, he can be arrested but ONLY if he comes back to Singapore.

  • bahari ujang

    I was a gurantor for my nephew when he sign on the army with MINDEF earn as you learn acheme. Half way he quit and wad made to pay. He only paid the loan payment from jun 2007 to mar 2008 and balance more than $7000. I only received the notice of default payment last year. My nephew has made the arrangement to pay by GIRO. But again this I was a gurantor for my nephew when he sign on the army with MINDEF earn as you learn. He only paid the loan payment from jun 2007 to mar 2008 and balance more than $7000 unpaid. I only received the notice of default payment in 2015. I told my nephew to make an arrangement to pay by GIRO. But again this year I received another notice of the default payment. Do MINDEF have the right to made me pay back the loan for my nephew since I only knew about the default payment after 7 years. Do MINDEF have the right to made me pay back the loan for my nephew since I only knew about the default payment after 7 years?

  • Zephne

    Can anyone advise me? I owe my previous company $3900+ (due to quitting before the time is up) and they only gave me a period of 2weeks to pay. I don’t want to let my family know of this but my previous company told me they would engage in these external dept collectors if I fail to pay within the timeframe. They wouldn’t even let me pay by installment. I’m not sure what will the collectors do and I’m really afraid!

    • bmvjr

      Dear Zephne, i shall not go into your quitting before the agreed term or why your ex-employer may be upset and unwilling to accept payment by installment, simply because i don’t know all the facts from all sides. However, if you have the bank details and account number of your former employer that you are expected to pay to, here is a thing you can do, always assuming that you are in deed legally obliged to pay the 3.9k : make a part payment (for example 500$) into that account with reference to your case. Any steps or proceedings your former employer wants to take up against you can be rebuffed, if they demand 3.9k plus cost and interest from you because the amount actually owed after you made that part payment is not 3.9k but only 3.4k ! Keep on making part payments whenever you can, say at least 300$ every 2-3 weeks and keep a copy of the bank deposit slip for each of your part payments! This is your proof and evidence! Your part payments reduce the owed amount and usually every claim, coming from the employer directly or from outsourced debt collectors or even from the courts is not based on the open balance after your last part payment but higher – so any such claim is not justified and can not be processed because the actual amount is lower than what that party claims. That is why you have to keep the bank deposit slip copy as proof. Don’t worry about “last reminders” for amounts higher than what you actually owe – they are not valid in court as long as you can proove that your actual open balance is lower than what such reminders state. Also don’t worry too much about any party threatening to start “legal proceedings” against you. This is mostly meant to pressure you but before they do, they will think twice as legal proceedings cost them money. Besides, if anyone wants to start legal proceedings based on say 2.9k and you already are down to say 2.5k by your part payments, their attempt to start legal proceedings will be rejected and fail, because they started with claiming the wrong amount. Again, keep your payment records as proof, until this whole thing is completely settled and history. You can stay in control of things this way but only if you continue to make part payments until the amount is fully settled. Print this advice out for yourself, refer to it every time you get mail on this matter, read through it carefully and follow the steps and you will be fine. Keep all mail you receive in this matter on record – you may need it. Do not accept any proposals by debt collectors, ignore them and don’t listen if they talk big about taking you to court – they won’t. They just try to make money by adding ridiculous amounts of alleged interest, cost etc. to your actually owed amount. Ignore this, focus on your part payments directly to your former employer and never make a payment to a debt collector! Relax, hang in there, start a first part payment fast and continue with it, regardless of your employer rejecting installments or not.

    • Shaheed Kolavayal

      Basically, the compensation condition that an employee pay the company for sudden resignation is quite a grey area. I have resigned from so many companies out of a sudden and even some high profile ones in a jest and they didn’t even bother to chase for salary compensation. As long as it’s below 10K, you are safe.
      A company even demanded I pay them back after they terminated me 24hours. I was being investigated for a crime I did not commit and I was recommended by the investigator to be terminated. I wrote to the top management that I was not given a fair hearing and it was unfair dismissal. The company could have ask me to tender within two weeks or one month notice but they chose to terminate me.
      I didn’t pay a single cent until now.
      Tell your family the truth and expect the worst that the legal ah long will visit you. Just tell your family to tell them that you are no longer staying there.
      But at the same time, continue to make payments as you can afford it and keep a receipt and record of it. No matter how small the sum is, they have to accept it. If this ends up in court, the advantage is you have been making regular payments RATHER than no payments at all.

  • Zack

    Hi I need an advise here.
    I sign-up a course with a Private Education Institute last year and the total course fee was approx $14000. Upon starting the first term of the course, I was required to pay the first installment of the course of approx $7000 to the institute. However, due to work, I am unable to attend the course anymore and have since stopped after the first term. Currently, the institute is demanding the me to pay the remaining of the course fee of approx. $7200. Somehow I feel that it is unfair for me to pay the remaining fees as I did not attend the classes anymore. The institute have no engaged Dun & Bradstreet to collect the remaining fees from me and they notified that I would need to make payment within 7 days or I will receive a lawyer letter for this. I’ve made a call to dnb and they told me to present my dispute on this matter but they said that it is not acceptable and then counter offered me a 6 months installment scheme to repay it. To me, it still still very difficult to pay $1000+ a month and I told them I could only manage $200-300 a month which they then said they could only allow installment of 6 months. I did not agree to any deal made by them and told them instead to give me time to think about it.
    I was wondering what would happen if I were to ignore them?
    Hoping someone could advise me on this matter.
    Thanks.

    • Shaheed Kolavayal

      You paid 7K and then you stop after first term due to a valid reason. You should check the terms and conditions if you should continue paying them. If you stop due to work, you shouldn’t be paying anymore or they should pay you the balance.
      It is unlike you complete the whole course but still have not paid the remaining.
      But if you choose to, then pay only what you can afford sincerely and keep a record of every payment. The reason D&B and most debt collectors demand a different and higher instalment scheme is because they earn more commission that way. They only earn a rabbit’s turd if you end up paying $200.
      There should not be any monthly interest in this except maybe for $50 everytime D&B sends you a letter, to which I won’t give a rat’s ass.
      I suggest you read and re-read your registration and application forms and the terms and condition. It’s funny that you paid half and quit halfway is asked to make full payment. Write to Council for Private Education http://www.cpe.gov.sg and ask them if this it is right that a pte school ask for the remaining fee.

  • Audrey

    Hi, would like to get some advice.
    Two years back, I was a student at an US university. While I was there, there were some talks about a study abroad program. Recently, it was brought to my attention that I had applied for the program and withdrew from it after the due date due to which I have to pay for the course. I wasn’t aware that there was a due date or that I had to pay for the course even if I withdrew from it. I didn’t even remember applying for the course until it was brought to my attention.
    Now, they have passed my account to a debt collection agency in the US. What I would like to know is what would they be able to do? Will it greatly affect my life in Singapore?
    Your advice would be greatly appreciated. Thank you.

    • Shaheed Kolavayal

      Their jurisdiction is in the States only. Though if they find out your contacts in Singapore, they may use some scare tactics.

  • Shaheed Kolavayal

    I used to be afraid of debt collectors and lawyer letters before but not anymore. I owe so much credit cards that the interest alone is like 90percent of actual use. You can carry on rolling the interest, nothing scares me. I have ticked off lawyers, law firms, debt collectors who use high-handed scare tactics and even report one firm to the Law Society for using illegal methods to gain my new address and causing my late mother to have a heart attack (debt collector came and told my mom how much I owe banks).

    Bankruptcy sounds bad but its a short term imprisonment to get your life sorted back and to make the vultures stop hounding you in flocks. You want my money, queue up and speak to my OA. So what if you are owed 20K? The other bank is owed 5K so it may get the money first.

    In fact, for so many donkey years, the banks have not been taking actions against me because they are not sure whether they can get the money first or not. Worst comes to worst, I can pay them $50 per month.

    You can spend thousands of dollars to initiate a bankruptcy on me but you cant be sure if you will be first in line.

  • Xiaogui

    Hi I have a question. I used to be an ex insurance agent. When I joined them, I took a scheme where I’ll will be given another sum of amount if I hit my monthly target. This scheme lasts for 6 months. However if I leave within a year without hitting my 6 months target, they will request for me to compensate them back any amount that I have taken from the scheme.

    4 years later, they come back with a credit company asking me for the amount of 13,250. I made a payment of $2,000 but the credit company did not issue me any receipt. From then on I didn’t answer their calls anymore cause I’m afraid it’s a scam.

    Now they have send me another email asking me to call them back to prevent any legal proceedings. What should I do? Call them or wait?

    Similarly, they also only give me a installment plan of only 6 months and require me to pay $1,000 for each month.