Loan recovery is not just about collecting paymentsโitโs about maintaining trust, adhering to compliance, and protecting your brandโs reputation. A single misstep by a collection agency can result in customer complaints, legal issues, and even regulatory penalties from authorities like the ๐ฅ๐ฒ๐๐ฒ๐ฟ๐๐ฒ ๐๐ฎ๐ป๐ธ ๐ผ๐ณ ๐๐ป๐ฑ๐ถ๐ฎ (๐ฅ๐๐).
But the reality is, not all collection agencies operate within ethical or legal boundaries. Many use aggressive tactics that violate borrower rights and put financial institutions at risk. If you’re working with a third-party collection agency, itโs time to ask:
๐๐ฟ๐ฒ ๐ง๐ต๐ฒ๐ ๐๐ผ๐น๐น๐ผ๐๐ถ๐ป๐ด ๐ฅ๐๐ ๐๐๐ถ๐ฑ๐ฒ๐น๐ถ๐ป๐ฒ๐ ๐ผ๐ฟ ๐๐ฟ๐ผ๐๐๐ถ๐ป๐ด ๐๐ต๐ฒ ๐๐ถ๐ป๐ฒ?
Here are some ๐ฟ๐ฒ๐ฑ ๐ณ๐น๐ฎ๐ด๐ that indicate your collection agency might be doing more harm than good:
๐น ๐๐ฎ๐ฟ๐ฎ๐๐๐ถ๐ป๐ด ๐๐ฎ๐น๐น๐ ๐ฎ๐ ๐ข๐ฑ๐ฑ ๐๐ผ๐๐ฟ๐
Are borrowers receiving calls before 7 a.m. or after 7 p.m.?
๐ฅ๐๐ ๐ฝ๐ฟ๐ผ๐ต๐ถ๐ฏ๐ถ๐๐ ๐ฐ๐ผ๐น๐น๐ฒ๐ฐ๐๐ถ๐ผ๐ป ๐ฐ๐ฎ๐น๐น๐ ๐ผ๐๐๐๐ถ๐ฑ๐ฒ ๐น๐ฒ๐ด๐ฎ๐น ๐ต๐ผ๐๐ฟ๐, yet many agencies ignore this rule, leading to complaints and potential legal action.
๐น ๐จ๐๐ถ๐ป๐ด ๐๐ป๐๐ถ๐บ๐ถ๐ฑ๐ฎ๐๐ถ๐ผ๐ป & ๐๐ฎ๐ฟ๐๐ต ๐๐ฎ๐ป๐ด๐๐ฎ๐ด๐ฒ
Are agents being rude, aggressive, or threatening borrowers? Abusive language is a major violation, and borrowers have the right to report such behaviour.
๐น ๐๐ฎ๐ถ๐น๐ถ๐ป๐ด ๐๐ผ ๐๐ผ๐ป๐ณ๐ถ๐ฟ๐บ ๐ง๐ต๐ฒ๐ถ๐ฟ ๐๐ฑ๐ฒ๐ป๐๐ถ๐๐
Are your agents informing borrowers about who they are, which institution they represent, and why they are calling? Anonymity and misrepresentation can land your organization in legal trouble.
๐น ๐๐ถ๐๐ฐ๐๐๐๐ถ๐ป๐ด ๐๐ผ๐ฎ๐ป ๐๐ฒ๐๐ฎ๐ถ๐น๐ ๐๐ถ๐๐ต ๐ง๐ต๐ถ๐ฟ๐ฑ ๐ฃ๐ฎ๐ฟ๐๐ถ๐ฒ๐
Are agents sharing borrower information with coworkers, friends, or family members? Confidentiality is non-negotiable, and breaching privacy laws can damage your reputation.
๐น ๐ ๐ถ๐๐น๐ฒ๐ฎ๐ฑ๐ถ๐ป๐ด ๐๐ผ๐ฟ๐ฟ๐ผ๐๐ฒ๐ฟ๐ ๐๐ฏ๐ผ๐๐ ๐๐ฒ๐ด๐ฎ๐น ๐๐ผ๐ป๐๐ฒ๐พ๐๐ฒ๐ป๐ฐ๐ฒ๐
Are agents exaggerating the consequences of non-payment, falsely claiming arrests or legal action when none is initiated? Providing incorrect legal information is a serious violation.
๐ง๐ต๐ฒ ๐ฅ๐ฒ๐ฎ๐น ๐๐ต๐ฎ๐น๐น๐ฒ๐ป๐ด๐ฒ: ๐๐ถ๐บ๐ถ๐๐ฒ๐ฑ ๐๐๐ฑ๐ถ๐๐ถ๐ป๐ด ๐ฅ๐ฒ๐๐ผ๐๐ฟ๐ฐ๐ฒ๐
Banks and NBFCs often struggle to audit their collection agencies effectively. Consider this:
โคYou may have 200-300 collection agencies operating under your brand.
โคBut you may only have a handful of auditors (2, 4, or 5) to oversee them.
โคConducting physical audits at each agency is time-consuming, costly, and inefficient.
โคBy the time violations are identified, the damage is already done.
๐ง๐ต๐ถ๐ ๐๐ ๐ช๐ต๐ฒ๐ฟ๐ฒ ๐ง๐ต๐ฒ ๐๐๐๐ ๐ฆ๐๐ฒ๐ฝ๐ ๐๐ป
At The KGAC, we act as your extended compliance team, ensuring that every collection agency under your brand follows RBI regulations and ethical collection practices.
โ 24/7 Monitoring & Compliance Audits
We conduct ongoing audits of collection agency activities to detect unethical practices before they escalate.
โ Call Recording & Behavior Tracking
Our team reviews call logs and recordings to ensure proper communication, no harassment, and adherence to guidelines.
โ Data Privacy & Confidentiality Checks
We verify that borrower information is handled securely and not shared with unauthorized individuals.
โ Mystery Audits & Compliance Testing
We conduct surprise audits to see how collection agents interact with borrowers, ensuring complete compliance.
โ Actionable Reports & Risk Mitigation
We donโt just find the problemโwe help you fix it with detailed reports and action plans to correct non-compliance issues immediately.
๐ฃ๐ฟ๐ผ๐๐ฒ๐ฐ๐ ๐ฌ๐ผ๐๐ฟ ๐๐ฟ๐ฎ๐ป๐ฑ ๐๐ฒ๐ณ๐ผ๐ฟ๐ฒ ๐๐โ๐ ๐ง๐ผ๐ผ ๐๐ฎ๐๐ฒ
With RBI cracking down on defaulters and unethical collection practices, ensuring that your agencies operate within legal and ethical boundaries is no longer optionalโitโs a necessity.