What can a debt collector in Singapore actually do?

Although debt collectors in Singapore follow a code of conduct, it's not the same as having an actual law. It helps to be aware of what debt collectors can or cannot do.

In theory, the Credit Collection Association of Singapore (CCAS) has a code of conduct for their debt collectors. But then again, so did pirates in the 19th century.

Having a code of conduct is not the same as being bound by an actual law. While there have been recent calls for laws governing debt collection, the Singapore government hasn't passed one yet.

So in the meantime, you should focus on knowing what debt collectors can or can't do:

THERE IS A STATUTE OF LIMITATIONS TO LOANS FROM FAMILY AND FRIENDS 

First, note that it is legal to lend to friends and family without a license, at any agreed upon interest rate (it's not legal to lend to businesses). However, the written agreement (the IOU) is subject to a statute of limitations.

Debtors must initiate legal claims within six years of the stipulated repayment date. After that, the borrower is not obliged to pay.

If there is no IOU, or the statute of limitations is past, you may not be obliged to make repayment - no matter what the debt collectors may tell you.

DEBT COLLECTORS CAN TALK TO FAMILY AND FRIENDS

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In general, anything a friend or relative could legally do (if you owe them money) is also what a debt collector can do.

They can stalk your Facebook, drop by the office and ask to speak with you, or call the house and ask where you are.

Unfortunately, this means they can tell your wife, or children, or whoever picks up the phone that they need to talk to you about the money you owe.

DEBT COLLECTORS CAN HELP MEDIATE AND NEGOTIATE LOAN REPAYMENT PLANS 

While the common image of debt collectors is of thugs with bats, this is seldom the case (among legal debt collectors at least). This is because debt collectors are still subject to the Protection from Harassment Act, and can go to jail for behaving like gangsters.

As such, most debt collectors these days are more like very assertive bank tellers than triad gangsters. In fact, many have leeway to negotiate a little - if you propose an instalment plan for repayments, for example, they may take it back to their employer. Likewise, they may also be empowered to offer you various repayment solutions.

The CCAS code of conduct even asks that debt collectors accept repayment plans, provided the debtor can prove they don't have the funds for full repayment.

WHEN DEMANDING REPAYMENT, DEBT COLLECTORS CANNOT GATHER IN GROUPS GREATER THAN 5 

Once the group numbers more than five (e.g. they brought along a crowd of 20 people to shout obscenities and impede your business), it counts as an illegal assembly. Call the police and they'll be arrested.

DEBT COLLECTORS CANNOT INDUCE HARASSMENT, ALARM, AND DISTRESS 

The specific details are under the Protection from Harassment Act (see above). Note that causing distress can mean verbal harassment. For example, if the debt collectors threaten to harm your pet, and you are distressed by the remark, they've broken the law.

Other things that are forbidden include:

• Unlawful stalking (following you around after work, loitering near your house, circulating compromising pictures of you)
• Threatening physical violence and brandishing a weapon (in case it needs to be said, actually hurting you is illegal)
• Defacing your property and other acts of vandalism (such as spray painting notices on your walls, or knocking your phone out of your hand)

DEBT COLLECTORS CANNOT IMPERSONATE GOVERNMENT BODIES 

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It's illegal for debt collectors to pretend to be government agents, such as tax agents or police officers.

They are also not allowed to put up spoof sites (websites that mimic government agencies), or use fake government letterheads.

Be sure to check with the proper authorities, if you get official-looking letters or messages about your debt. It's unusual for government bodies to be involved in these matters.

WHAT HAPPENS WHEN DEBT COLLECTORS GO TOO FAR? 

If a debt collector goes too far, you should report it to the police. You can file for a Protection Order, if there is sufficient proof that they are harassing you. Remember, the debt collector has no more rights than any other private citizen to whom you owe money.

IT'S BEST TO AVOID MONEYLENDERS ALTOGETHER 

When you have to borrow, try getting a personal loan from reputable organisations, such as recognised banks and Financial Institutions. Avoid borrowing from licensed money lenders. Not only do they charge extremely high interest, they are also more prone to resorting to debt collectors (or trying to collect the debt themselves).

This article was first published in SingSaver.com.sg.