Now, Recovery Agents Target HR Depts With Staff Complaints

May 19 2010

By : Daniel P George, TNN; The Times of India

CHENNAI: Recovery agents of banks and financial institutions have devised a new way of arm-twisting credit card holders and loan defaulters into paying up their dues calling up the human resource department of their companies to complain about the defaulting employees.

Confirming the move, recovery agents said that in many cases, visits to the homes and offices of the employees were not enough to pressure people to pay up. "It has worked in many cases as the employees feels the HR department will take stern action against them," said Abdul Wahab, a recovery agent attached to a nationalised bank.

CV Gidappa, general secretary of the Credit Card Holders' Association of India, also said that banks were now resorting to approaching the HR departments to cause fear among defaulters.

"It is a matter of dispute between the borrower and the lender and one can't understand why banks are approaching the employer. It creates bad blood," Gidappa said. He said in many cases the employers had promptly sacked the defaulting staff as they feared the company's image was at stake.

"We know that banks are doing this on a large scale because I have received many complaints from professionals who have been sacked in this manner of late," he said.

Gidappa said one woman was called by her manager halfway through a project and asked to resign as she had defaulted on installments on a personal loan she had taken from a bank. The employee, when contacted, said, "I was not allowed to give my version. It was not a secured loan and the company had no stake in it. But since it was I who handed the resignation letter, I am not in a position to take them on legally."

Giddappa said instances where companies have sacked employees for defaulting are on the rise. One IT company is learnt to have sacked eight employees in this manner.