The crucial takeaway from the Debt Collection Bill, which was passed in Parliament this week, is that while debt collection is a legitimate activity, carrying it out in ways that amount to harassment is not. The law has now come down explicitly on behaviour that amounts to aggressive pressure or intimidation because that has been a source of public concern. Thus, debt collectors who brandish a fist, threaten physical harm or put up notices with the personal information of debtors may be jailed and fined under new regulations. The debt collection industry will also be regulated with the aim of preventing problematic debt collection conduct. These moves are necessary in the light of the number of police reports made against the conduct of debt collection businesses and those in their employ, which have remained high: averaging 367 reports annually from 2018 to last year.

Indeed, debt collection firms have seen robust demand for their services amid a rising trend of companies and individuals failing to service their debts as they struggle with the aftermath of the pandemic and rising inflation. Those seeking such services range from businesses that did not get paid for work done, to people owed money by their spouses or colleagues. Since the market reputation of debt collection firms depends largely on the extent to which they are successful, some firms might be tempted to employ strong-arm tactics to recover what is owed to their clients.