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Who is a recovery agent?

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"Borrower rights" is a crucial yet often overlooked topic, holding immense importance due to the debt traps many individuals fall into because of limited knowledge and awareness. This issue needs discussion because numerous people undergo significant stress due to financial hardships.

The Role of Recovery Agents:

A recovery agent is an individual employed by a collection agency, hired by a bank to recover outstanding debts. It's crucial to note that these agents are not direct employees of the bank but often present themselves as such during their debt collection activities, sometimes even going to the extent of visiting individuals at their homes. If the agent visits homes without proper ID and authorization, it's unlawful (most people aren't aware of this due to a lack of customer awareness).

What Recovery Agents Can't Do: Guidelines by RBI

To safeguard individuals from unfair debt collection practices, the Reserve Bank of India (RBI) has established guidelines that recovery agents must adhere to. Understanding these guidelines is essential for those dealing with debt-related challenges. Here are some key points to consider:

a) Pre-Employment Police Verification:
When a bank engages a recovery agency, the bank should ensure that the agency conducts pre-employment police verification of its agents. This step aims to verify the legitimacy and background of the individuals involved in debt recovery.

b) Prior Notice for Home Visits:
f a bank intends to send recovery agents to an individual's home then the bank must provide prior notice. This notice serves as a respectful and lawful way of informing individuals about the upcoming visit.

c) Identification by Banks:
Recovery agents, when visiting homes, must carry proper identification provided by the bank they represent. This measure ensures that individuals can verify the legitimacy of the agent's association with the bank and their authorization to make visits.

d) Time Restrictions on Calls:
Recovery agents are prohibited from making calls before 7 am or after 7 pm. This time restriction is in place to prevent individuals from being disturbed during inappropriate hours.

e) Protection Against Harassment:
Individuals have the right to file complaints with the RBI if they experience abusive harassment from recovery agents. This avenue empowers individuals to seek recourse against unfair practices.

FREED: Your Trusted Advisor

Recognizing that dealing with coercive collection agents can be challenging, including facing harassment from them, organizations like FREED aim to provide support and guidance. As your trusted advisor, FREED offers services such as assisting you in becoming debt-free, budgeting, and addressing issues related to aggressive debt-collection practices.

In conclusion, understanding the identity and role of recovery agents is crucial for individuals navigating financial difficulties. Armed with knowledge about their rights, individuals can better protect themselves against unlawful debt collection practices and seek assistance from reputable organizations like FREED to navigate their financial challenges effectively.

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