Financial Institutions seduce the gullible

Introduction
The last couple of years have seen the emergence of LOAN MELAS promoted by leading multinational banks and financial institutions. The marketing strategy adopted by these institutions have been so aggressive that loan distribution seemed to be their main focus rather than identifying the right target audience to distribute the loans. The basic guidelines for loan eligibility determination are thrown to the winds, thereby the in eligible also are trapped into this vortex of loan melas.

Seduction
The state of minds of the current day customers to reach out for financial assistance has been made even more susceptible and fragile, due to the ever increasing appliances of luxury and their tie-up with these financial institutions. This has seduced those who otherwise would not have even looked at those appliances as one of necessity to go in for procuring it. This has also led to purchases, which are never need based.

Fractured Repayment
The primary phase of getting the easy financial assistance and the acquiring of the luxury appliance may all look rosy, but the real problems start when the loan repayment commences. The repayments are made with great difficulty at the earlier stages of the schedule and as things progress casualness sets in and the repayment schedule is broken. It is then that the banker’s problems also start.

Loan Recovery
The recovery of loan is the most important aspect of any financial institutions business and to succeed in their business operations, these financial institutions will go to any extent, may be even to the extent of adopting STRONG ARM techniques to recover the loan. This they do not get involved directly, but through third party loan recovery agents. Targets are set to the recovery agents and any shortfall in achieving the targets has a direct impact on the third party agents from whom the financial institutions recover those shortfalls.

Agents Recovery Practices
Any non-conformance to the repayment schedule, the agents start attacking the psyche of the defaulters mentally. They humiliate them in public. They even go to the extent of saying as to why one should lead such a life at all and death would be a better option. These are some of the mild comments that the recovery agents adopt. There have been several instances of middle class people who have taken the extreme step of committing suicide, clearly blaming the agents or their action.

Support group.
These sequences of events have lead to some able minded, community service oriented professionals to join together to form a support association to prevent harassment by the agents. These groups normally consist of lawyers, psychologists, Psychiatrists, social workers and financial experts to provide counseling to defaulters.

One such group recently formed is MACCAN (Move Against Credit Collection Agony and Nuisance) a Chennai based association. Apart from counseling, they also provide guidelines to banks which need to be adopted by them while dealing with the third part agents and to ensure proper behavior and harassment free collection procedures.

Summary
It is suggested that people are aware of such associations in case of harassment from recovery agents and approach them for any help to resolve such debt collection harassment and disputes.