Consumers bemoan debt collectors' methods
Consumers bemoan debt collectors' methods
The Jakarta Post, Jakarta
After being roughed up by a credit card debt collector, Abadi
Negara Sinulingga swore he would not pay the Rp 10 million
(US$1,058) owing to the credit card company until he received an
apology.
"The debt collector hit me in front of my employees! Can you
imagine how humiliated I felt?" he said at a discussion on credit
card complaints on Saturday, held jointly by the Indonesian
Consumers Foundation (YLKI) and Bank Indonesia.
As the number of credit card holders continues to grow at a
rapid pace, from 4.5 million in 2003 to 7.5 million in 2004, more
Indonesians, such as Sinulingga, are becoming familiar with the
presence and practices of debt collectors.
YLKI chairwoman Indah Suksmaningsih said a recent survey
conducted by the organization revealed that 30 percent out of 901
credit-card user complaints lodged with the organization from
March 2 to May 15 this year were about practices of debt
collectors.
She said the stringent debt recovery targets and quotas set by
credit card issuers put pressure on the debt collection agencies
they contract.
"As a result, debt collectors use any means to reach these
goals," she said.
Indah said YLKI regularly received complaints from people who
felt "terrorized" by debt collectors, such as family members
receiving threats and rude phone calls in the middle of the
night, being accosted at their homes or workplaces, the threat or
use of physical force, or having their possessions confiscated.
"I don't think the methods used by debt collectors here would
be legal in other countries," she said, adding that credit card
issuers often looked the other way concerning these practices.
The rapid increase in credit card holders has seen the volume
of credit card transactions increase as well, from Rp 19.2
trillion in 2001 up to Rp 37.6 trillion last year.
Bank Indonesia recorded that the amount of bad credit card
debt in 2004 was about Rp 1 trillion, or 8.7 percent of the total
outstanding credit card debt of Rp 11.8 trillion.
The central bank director of accounting and payment system,
Mohamad Ishak, said even though the use of debt collectors was
left up to the individual issuers, they could find an alternative
way to settle bad debts.
"One way is for them to ask a customer to come to their office
and ask what the problem is," he suggested. (002)