What Debt Collectors Can and Can’t Do Under the Law?

What Debt Collectors Can and Can’t Do Under the Law?
Debt Management

As the moneylending industry in Singapore progressed, so are the schemes and scams created to deceive borrowers. One particular problem is the rise of loan sharks who would use debt collectors to intimidate and harass their unfortunate clients. This why it is important to only trust licensed moneylenders.

These lenders are bound by the rules and regulations set by the government and are expected to abide by legal debt collection practices. If in case, one of them violates the rights of borrowers, it would be easy to report them to government agencies.

In this article, learn what to expect from legitimate debt collectors. Know your rights as a borrower, so no debt collector will take advantage of you in the future.


So, What Are Debt Collectors?

Debt collectors are groups or individuals whose job is to collect the repayment of people who owe money. Debt collectors are legal in Singapore. They are allowed to work under certain legal limitations and restrictions. But, they must not hurt debtors in the process of doing their job.

Debt Collectors in Singapore are bound by the code of conduct from the Credit Collection Association of Singapore (CCAS). To date, the Singapore government has not made laws to regulate debt collection agencies in the country. We all know that a code of conduct is less powerful than the law. As a result, borrowers are often left vulnerable to the abuses of the debt collection process in Singapore.


What Debt Collectors Can Do?

1. Debt collectors can talk to family and friends

Did you know that debt collection agencies are actually allowed to talk to your family and friends? They can call or reach out to you, and if they happen to talk to your wife or other family members, they can discuss your loans or debts.

Additionally, they can follow your social media, conduct a surprise visit in your office or home, and contact you on your personal mobile or office phones.

2. Debt collectors can help mediate and negotiate loan repayment plans

But, here’s the upside. Debt collectors are capable of mediating and negotiating your loan repayment plans. If you are having trouble settling your debts or if you find the interest rate of the loan too high, you can ask your debt collectors for repayment solutions or for a change in your installment plan. These debt collectors will then raise your concern to their employer.


What They Cannot Do

Needless to say, existing laws are applicable to debt collectors. Much like everyone in society, they are not allowed to harm, intimidate, or (physically, mentally, psychologically) abuse anyone. Here are other specific things a debt collection agency is not allowed to do.

1. Unlawful Assembly

If they choose to have more than 5 people when they collect a debt just to intimidate you, you can actually report them for illegal assembly. Just report them to the authorities. They will surely be arrested.

2. Injure, harass, threaten, or intimidate

Debt collection agencies are in no way, and I mean no way, allowed to touch you or inflict you an injury. Even if you fail to repay your loans, credit cards, or other debts, it is illegal for debt collectors to harass, threaten, or intimidate you in any way possible. Note that harassment or intimidation may come in various forms. It may not be physical, but if you feel like if your life is put in danger, you can call the police or ask for help from authorities immediately.

3. Vandalism

In some cases, debt collectors would vandalize your property instead of hurt you. Note that even this kind of intimidation and abuse is not allowed.

4. Unlawful Stalking

As mentioned above, debtors are allowed to call you, your office, or your home. But, this power is also limited. A debt recovery company is forbidden to follow you after work, stalk you outside your house, release personal or compromising photos of you.

5. Damage or take your possessions

Even if you fail to pay your loan, a debt collector should never damage or take your property in exchange for your loan. In grave cases, settling your credit card debt or your personal finance problems should be done with the help and guidance of government bodies. A collection agency should never force you to give them your money or property.

6. Violate your privacy

Collectors are not allowed to open your bank account, avail of money withdrawal services on your behalf, or investigate your personal finance. Also, they should not reveal your private and personal details like your email address, contact information, or information about your bank accounts to other bank companies.

Most importantly, remember that even if you owe them money, debt collectors cannot force you to give them money or any amount.


How to Report Unlawful and Illegal Acts?

1. Call the police

If you encounter any of the illegal acts mentioned above, the best thing to do is to call the police.

2. Apply for a protection order against debt collector

You can avail of protection from Harassment Act. Also, as a debtor, you can apply for a protection order from loan companies that threaten you in any way. Also, government agents will provide you the necessary assistance to file any legal complaints against a debt collector who violated your right.

3. Make a complaint to the Credit Collection Association of Singapore (CCAS)

Also, as a debtor, you can file a complaint to the Credit Collection Association of Singapore (CCAS) if you feel like a collector has violated their code. They will do necessary actions in making sure that the violator meets the punishment they deserve. Take note, though, that a code is not as strong or compelling as law.

4. Seek help from a lawyer

You can also seek help from a lawyer if you wish to bring the matter to higher legal ground. Also, you can ask their advice if you can avail of any financial compensation for a bad experience with a debt collector. Though this might be the most helpful step for you, remember that hiring a lawyer can cost you big bills. You might have to spend your own money to avail their legal services.



Take note that paying a debt collector is not necessarily a problem. The problem lies with the fact that there have been cases before where debtors have experienced violent actions from a debt collector.

It is important for debtors to realize that loan agencies in Singapore must never use force and violence to ask for any credit repayment. There is no justifiable reason for an agency to force a debtor to pay.

Our advice to you is to take a loan from a licensed moneylender. As a borrower or debtor, you are protected by laws and regulations. It is less likely that you will experience harassment and intimidation from a debt collection agency.

Licensed moneylenders are governed by strict government regulations. It would be easier for a debtor like you to seek help from the authorities if in case you had a bad encounter with them.