Chapter III PROHIBITION OF COERCIVE RECOVERY

Prohibited coercive recovery methods and practices.—No lender, agent, employee, contractor, or representative acting on behalf of any lender shall engage in, attempt, threaten, facilitate, or encourage any of the following acts, practices or similar activities for the purpose of recovering any loan amount, interest, charges, penalties, or any other amount claimed to be due:

1. (1) Physical coercion, violence, and intimidation.—
   • (a) Physical assault, battery, wrongful restraint, criminal intimidation, or violence against the borrower, family members, or associates;
   • (b) Threatening physical harm or violence to any person connected with the borrower;
   • (c) Confining, restraining, or preventing free movement of the borrower or family members through force or intimidation;
   • (d) Damaging, destroying, or threatening to damage any property belonging to the borrower or guarantors;
   • (e) Forcibly entering the borrower's residence, workplace, or premises without lawful authority or remaining after being asked to leave.
2. (2) Psychological harassment and mental torture.—
   • (a) Using abusive, obscene, threatening, casteist, communal, or discriminatory language in any communication;
   • (b) Making repeated calls, messages, or visits causing mental distress or disrupting daily life;
   • (c) Contacting borrowers before 7:00 AM or after 8:00 PM on weekdays, or anytime on Sundays and holidays, without express written consent;
   • (d) Publicly shaming, humiliating, or exposing the borrower's financial status or personal information to embarrass or coerce;
   • (e) Creating public disturbances at the borrower's residence, workplace, or neighborhood;
   • (f) Making false representations about legal consequences or creating artificial urgency for payment.
3. (3) Digital harassment and cyber coercion.—
   • (a) Sending threatening, intimidating, or abusive messages through SMS, WhatsApp, email, or social media platforms;
   • (b) Disclosing or publishing personal information, financial details, photographs, or private data without explicit written consent;
   • (c) Creating or distributing fake legal notices, court summons, or fraudulent legal documents;
   • (d) Impersonating police officers, court officials, lawyers, or government authorities;
   • (e) Accessing or using the borrower's phone contacts, call logs, or digital data without separate written consent;
   • (f) Installing tracking devices or monitoring software on borrower's devices without lawful authority;
   • (g) Creating fake profiles or misusing borrower's identity on digital platforms.
4. (4) Economic coercion and livelihood interference.—
   • (a) Seizing, confiscating, or unlawfully retaining documents, certificates, or government-issued entitlement papers;
   • (b) Interfering with the borrower's workplace attendance, employment, or business operations;
   • (c) Contacting employers, colleagues, or business associates to jeopardize professional relationships;
   • (d) Compelling disposal of property under duress;
   • (e) Blocking access to bank accounts or legitimate income sources.
5. (5) Social pressure and community harassment.—
   • (a) Pressuring family members, relatives, friends, or neighbors to create social coercion for repayment;
   • (b) Visiting children's schools or educational institutions to create embarrassment;
   • (c) Disrupting religious places, social functions, festivals, or community gatherings for recovery purposes
6. (6) Illegal and unethical recovery practices.—
   • (a) Engaging persons with criminal background or history of violence as recovery agents;
   • (b) Using unregistered or unauthorized recovery agencies or collection personnel;
   • (c) Demanding amounts exceeding limits prescribed under this Act or other applicable laws;
   • (d) hidden charges, or undisclosed fees;
   • (e) Attempting recovery from guarantors or family members without proper legal procedures.