Is a recovery agent calling you unnecessarily?

Calls are being made to customers who have not taken a loan. Rectify the issue immediately

It is a scary situation when you don't have a loan, but you are being harassed for non-repayment by recovery agents. It's a growing trend due to identity thefts through which loans are getting sanctioned under false names. But though you are not the recipient of the loan, you will do well if you act on the recovery agent's call at the earliest. Why? At least on paper, you are not debt free.

The modus operandi: Say, the customer had applied for a loan, home, personal or car, through a Direct Selling Agent (DSA) in the past and the application was rejected for some reason. These details, along with a forged signature, are used by fraudsters to reapply for another loan. The only difference: The account number that is given for the disbursement belongs to the fraudulent person.

Recent reports suggest that 15 residents of Mumbai-suburban-Thane were receiving calls from recovery agents for not paying the instalment on car loans. But these customers had never taken the car loan in the first place. The residents have filed police complaints and the investigations have been initiated. The money sanctioned for the car loans were used to purchase cars in the name of a transport company.

Mohan Jayaraman, managing director, Experian Credit Information Company of India, says that in such circumstances, the consumer must immediately approach the bank and explain the case. Based on this, the bank can start investigation. Simultaneously, the consumers could also write to the credit bureaus informing them of the instance of identity theft. "By the regulatory framework, remarks can be added to a consumer's credit information by the banks/credit institutions and can be reported to the credit bureau. This will be updated in the bureau records in real time. The issue is that even if the consumer has not taken the loan, if fraudsters defraud the system by committing identity theft and then there is a default on the loan, the consumer's credit history and credit score is impacted," he says.

 

While the onus would be on the bank to prove that loan documents and signatures belong to the consumer, the latter will have to be alert and follow-up with the bank to ensure that his name is cleared. For proof, the consumer can show the bank statement that he/she never got any payment or bought the car. Usually, people make the mistake of signing only the loan application while leaving the details to be filled by DSAs' operatives - a strict no-no from credit experts.

 

In case calls from recovery agents don't stop despite bringing the issue to the bank's notice, customers also have the right to file a complaint against the bank and claim compensation for harassment, says V N Kulkarni, debt counsellor with Abhay, a debt counselling centre.

"The bank is not supposed to divulge information in an application form to anyone. This information cannot be used for any other purpose. Customers must also write to the RBI's customer service cell and lodge a complaint. Even for recovery, banks must follow the procedure as prescribed by the Banking Codes and Standards Board of India (BSCBI),'' he says.