Aggressive debt collection activities – long the bane of financial systems in many countries around the world – have been strictly barred in the Sultanate of Oman, the Central Bank of Oman (CBO) has warned.
The caveat is set out in a newly introduced regulatory framework formulated by the apex bank for the protection of the rights and interests of financial consumers in the country.
A circular issued by the CBO to this effect prohibits licensed banking and financial entities, as well as their third party agents, from employing “abusive” debt-collection practices” in the pursuit of debtors.
“Abusive practices include, but are not limited to, daily phone calls, threatening, offensive, obscene, discriminatory or aggressive language, harassing relatives and coworkers, publicly embarrassing or shaming borrowers, knocking at borrowers’ doors, or making calls during late-night or early morning hours, adopting an intimidating manner, using or threatening to use violence or physical force against the borrower, misleading the borrower about the extent of debt or consequences of nonpayment,” the Central Bank explained in its circular.
Importantly, banks and other licensed financial institutions are mandated to formulate guidelines detailing the types of debt-collection practices that are “appropriate”, on the one hand, and those that are “inappropriate”, on the other.
Additionally, banks are required to clearly spell out in their credit agreements with customers the type of debt that can be collected on their behalf by third-party service providers, and the “manner in which such debt can be collected”.
Licensed entities transferring or selling their debt to another party, perhaps without the knowledge of the borrower, are obligated to notify their customers of the transaction, as well as provide all relevant information about the new owner of the debt.
Besides mandating fair debt collection practices, the new CBO regulatory framework also seeks to strengthen customer interests and safeguards with regard to: Disclosure and Transparency, Fair Treatment and Business Conduct, Data Protection and Privacy; Dispute Resolution; and Financial Education and Financial Capability.
@conradprabhu
Oman Observer is now on the WhatsApp channel. Click here
