Debt collectors in the US may not be so bad, after all

Not compared with debt collectors in India, anyway.

Vinod Kumar was sitting in a friend's car listening to the radio one evening last January when a stranger appeared, yanked him from the vehicle and beat him with an iron bar.

To collect a debt, that is. Here in the good ol' USA, debt collectors still rely on intimidation and mental abuse, which seems quaint and peaceful in comparison with the debt collectors in India. And get this for chutzpah: after a court awarded Mr. Kumar $140,000 for the beating he suffered, the bank who hired the thug (or "goonda") collection agency appealed the award as excessive.

While the 21-year-old college student lay bleeding in the parking lot, the assailant sped off with the tiny silver hatchback. But this was no ordinary mugging: Mr. Kumar's attacker was a /goonda/ -- a thug -- working on behalf of one of India's largest banks.

Ruling on Mr. Kumar's case in November, the Delhi State Consumer Commission fined ICICI Bank, India's largest privately owned bank by market value, almost $140,000 for what a judge called "the grossest kind of deficiency in service and unfair trade practice." ICICI Bank has appealed the decision to the Delhi High Court, arguing that the consumer court doesn't have the authority to impose such a large fine and that the collection agency should be held responsible for the attack, not the bank. It has also fired the collection agency responsible for the attack.

Read the rest of the WSJ article.

[crosspost: Caveat Emptor]

Comments

[Mark Aucamp]

Great Post. I found your articles especially useful and I will return as the content was excellent!

[David Johnston]

That story about collection agencies and banks’ dirty business is scary. Their debt collecting practices are unethical and barbaric. Imagine hiring thugs to threaten their borrowers! This is totally unacceptable. The bank and the collection agency should be closed not just fined.