Some time ago, the “Ah Long”menace used to shock the nation with reports of unscrupulous means of debt collections. Even then, the government managed to overcome such a problem. Currently, in replace of the “Ah Long Syndrome”, another form of debt collection has reared its ugly head. This time round, debt collectors make use of registered companies to legalise their businesses.
A debt collectoragency employs various means to collect any debt owed. They are specifically told not to take “no” for an answer and will try to get the money any way they can, be it through guilt, pressure or perseverance. First, it calls up the debtor repeatedly and also sends out letters. Failing such measures, a representative willpay a visit to the debtor’s house or workplace. Such persistence attempts to makea debtor pay up the outstanding balanceowed immediately.
If the debtor failsto pay, the collection agency begins to apply more pressure. So desperate are the tactics of debt collectors in debt collecting that they would always resort to lies. They may claim to be from government agencies such as Bank Negara, the High Court, Police Department and others. As a reward for their success, they are paidfor their services. This may seem harmless in itself, but it is also extremely unethical and illegal.
For every sen extracted from the debtor, debtcollectors are paid a commission which benefits their pockets. Moreover, if they reach a certain quota, they might even receive lucrative bonuses as incentives for their tireless efforts.
Legally, debt collectors cannot employ verbal threats or harassmentson debtors in any way(www.themalaysianinsider.com). They canneither threaten the debtor to take him to court nor use foul language when speaking to him.According to the Deputy Finance Minister (21 Dec 2009), this was included in the debt collection fair practice guideline and should be followed by the appointed debt collectors.
In reply to a question in Dewan Negara, DatukChor stated that, “Financial institutions can use the service of debt collectors but they must follow the regulations in the guideline approved by Bank Negara Malaysia,”Other than forbidding violence and harassment, debt collectors should be ethical and are not allowed to call loan takers more than three times weekly. Moreover, he affirmed that this is in line with efforts by Bank Negara Malaysia to strengthen the protection and professionalism structure of debt collection. Those dissatisfied with the financial institutions can lodge a report to Bank Negara Malaysia.
Credit card debt is an example of unsecured consumer debt which is accessed through credit cards.Debt results when a client of a credit card purchases an item or service through the card system. Debt accumulates and increases via interest and penalties when the consumer does not pay the bank for the money spent.
As a result of one’s inability to pay this debt on time,the bank will charge a late payment penalty, which upon accumulation, will consequently blacklist the debtor.
From the Islamic perspective, if the debtor is unable to pay, he or she is required to notify the creditors of the difficulty. Also, he is entitled to reschedule his debt payments. At the same time, the creditor is also obliged to accept the request postponement and provide concessions to the debtor. Such a provision is based on the Quranic verse, “If someone has difficulty so give ease to him” (Al-Baqarah:280).
In addition, many Hadiths encourage creditors to be lenient and provide convenience to debtors, if theywere to experience difficulty.
Critical problems from debt collectors arise not onlyfrom such circumstances, but also when the safety of personal information is compromised, for example, disclosure of identity card numbers.A collection agency may be staffed bymany employees who are armed with thousands of personal information stored in a computer database. Invariably, this information may be sold to other agencies.
On an international scale, thenational identity number is used by the governments of many countries as a means of tracking their citizens, permanent residents, and temporary residents for the purposes of work, taxation, government benefits, health care, and other governmentally-related functions.
Many countries issue such numbers ostensibly for a singular purpose, but over time, they become a de facto national identification number. With convenient accessibility, the number becomesutilised for other purposes to the point where it is almost essential to have one, for example, toopen a bank account, obtain a credit card, apply for a loan ora driving licenceor a cellular or land line, and buy air tickets, amongst others. In other words, all of our activities can be traced through this number at real time. Due to such convenience, the debt collector can easily get our entire personal information via the identity card number. In such an arrangement, how safe and confidentially privilegedthen can we feel?
Thus, the Personal Data Protection Act, aimed at preventing the abuse of citizens’ personal data for commercial purposes, has been enforced since Jan 1, 2013 (The Star, 12 December 2012).
The Deputy Information, Communications and Culture Minister stated that, “the Act, plays a crucial role in safeguarding the interest of individuals and makes it illegal for corporate entities or individuals to sell personal information or allow the use of data by third parties. This enactment of the Act was timely as it would facilitate the transfer and transmitting of personal and often very important information seamlessly”.
In his keynote address at the Second Annual Personal Data Protection Summit, Datuk Joseph Salangadded that the act gives the public more control over their personal data. Whenever consent is required for data processing, it will have to be given expressly rather than impliedly or be assumed. Moreover, he said thatorganisations would need to embark on continuous data privacy audit exercises to ensure compliance with the law as they faced increased responsibility and accountability in processing personal data disclosed to them.
Thus, to administer such a legislation, the Personal Data Protection Department was established on May 16, 2011.
Under the Act, “Offenderscan be jailed for up to two years or fined RM300,000, or both, if convicted”. Be that as it may, DatukSalang cautioned that this is an ‘open window’ to our lives which makes it easier for those with nefarious intent to obtain information and use it for their own ends.