Collection agencies are not there to make things difficult for debtors. They can even help you negotiate repayment plans.
In a festive nod to the Chinese New Year holiday, one of Fast Debt Recovery Specialist Pte Ltd’s collection agencies drew its cai shen ye costume as he does his rounds. As hilarious as that may be, there is more than meets the eye when it comes to debt collection agencies and the many assumptions people make about debt collection agencies.
Ready to educate yourself on the fascinating truths surrounding debt collection agencies in Singapore? Read more.
# 1 Debt collectors aren’t loan sharks
We don’t blame you for thinking that debt collection agencies and loan sharks or loan sharks are all the same thing. After all, debt collection agencies are often thick, sturdy and rightly intimidating in stature.
In fact, legal debt collection agencies in Singapore have nothing to do with usurers or even money-lending companies in general.
These debt collection agencies are the middlemen who are brought in to help businesses, companies and individuals recover money that their debtors owe. Collection agencies and their collection agencies typically take a discount on the recovered amount as a commission in addition to an upfront fee.
# 2 Collection agencies can help collect debts from friends and family
Demanding debt collection agencies don’t just accept a job. Open invoices must be submitted for companies and companies. For personal debts of friends and family, an acknowledgment of debt or at least a text message conversation must be provided. Professional debt collection agencies require proof of debt before filing a claim on your behalf.
In other words, you can hire a debt collection agency to recover the debt if that persistently irresponsible friend or family member owes you money but refuses to pay as promised.
However, keep in mind that the IOU or SMS conversation confirming debt is subject to a statute of limitations – it is only effective within six years of the stated agreed repayment date.
# 3 Collection agencies shouldn’t bother debtors – and more
Many are unaware of this, but legal debt collection agencies and their debt collection agencies are required to follow a code of conduct set by the Credit Collection Association of Singapore (CCAS). While not necessarily a law, professional debt collection agencies try their best to do their job while remaining ethical and law-abiding.
Here’s a quick rundown of the common things that debt collection agencies shouldn’t do:
Cause intimidation, alarm, or fear
Collect in groups of five or more when performing collections tasks
Use words or behavior that are threatening, insulting, or offensive
Use real violence
Destroying or damaging property or assets of debtors
Illegal stalking (eg, hanging out near debtors’ homes, tracking where debtors go)
Impersonating government agencies
# 4 Debt collection agencies can help you negotiate repayment plans
This may sound like a plot twist, but you read that right: debt collection agencies can help broker and negotiate loan repayment plans. As an intermediary, the most ideal situation would be one where the debtor is willing and able to amicably repay all the money owed, without asking questions.
As life would like, debtors may not be able to make full payments simply because they don’t have the money to hand. We all know how COVID-19 has caused so many to lose their jobs or have their pay cutDebtors may simply not be in a position to pay everything they owe.
This is where debt collection agencies shine the brightest. Rather than squeezing out absurdly impossible payments, debt collection agencies can mediate and negotiate loan repayment plans on behalf of debtors. A small discount or an installment plan might be the win-win solution for both the one who owes money and the one who is trying to get their money back.
# 5 Some debt collection agencies are very polite and empathetic
While the stigma that debt collection agencies bothering debtors doesn’t seem to be disappearing anytime soon, it’s important to realize that not all debt collection agencies are threatening, intimidating and unethical.
To put things in perspective, some debt collection agencies pride themselves on being empathetic, ethical and civic – even though it means taking fewer customers reject those who insist on using threatening tacticsSticking to their conscience and values also means they generate less income.
Think of the collection agency in cai shen ye costume we mentioned earlier in the article? He even left behind a promising Chinese New Year’s bag filled with treats and a angbao, therefore!
The often negative assumptions people make about debt collection agencies are not desirable. What many of us are unaware of is that some debtors actually treat civilian debt collection agencies in non-civil ways such as yelling, threatening, waving guns, splashing water and even calling the police if they are the ones not handling their debt.
Read these below:
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By Denise Bay
While Denise has a thing for travel, K-dramas, 0% sugar bbt (with boba!), Japanese cuisine, and flat white, her curious nature means that all kinds of random tabs are open 24/7 on her phone. She also doesn’t like paying full price for nothing.
The mail 5 Things You Didn’t Know About Collection Agencies in Singapore first appeared on SingSaver Blog – We compare, you save