It has been widely publicized that Citibank debt collectors caused the death of a man in Indonesia. The man killed, Irzen Octa, who had racked up a $5,700 debt on his platinum credit card to Citibank, was found dead on the bank's premises after being interrogated by third party debt collectors hired by Citibank to deal with long overdue debts.
Octa's widow said she first discovered that her husband had money problems when five men showed up uninvited at their Tangerang home one night in October and said they had come to get money. Unable to collect, they slept on a terrace outside the front door.
In the following months, debt collectors kept calling him. At the same time his debts kept rising because of hefty interest. In the end, his debt to Citibank was more than $11,000, including finance charges, but the bank said it was willing to settle for much less. He owed others money, too, and told his family members that they might have to sell their house.
Apparently, Octa left home at 6 a.m. to drop his daughter off at school and then headed over to Citibank to settle the debt. He told his wife, "Wish me luck." In the afternoon, a friend of Octa's went looking for him at Citibank and found him sprawled out on the floor with his nose bleeding and bruises on his head and abdomen.
There are conflicting reports on the circumstances of his death, as multiple autopsy reports have shown different results. The Washington Post has reported Citibank claims its "conducted its own private investigation and found no signs of physical violence."
Despite this uncertainty, the nation's government banned Citibank from adding any new credit card clients for two years, and banning Citibank from adding any new customers to its premium wealth service for one year. Due to the torture, false imprisonment and abusive collection tactics in relation to Mr. Irzen's death, 5 people, including 2 Citigroup employees have been charged. Apparently, someone posted a Youtube video showing the debt collectors being arrested!
Additionally, Citibank will not be allowed to use external debt collectors for three years in Indonesia. Apparently, the problem stems from collection agents that were outsourced as opposed to in-house. This is a huge setback for Citibank in what is Southeast Asia's biggest economy. Thus, Citi said last week it is hiring 1,400 debt collection staff in Indonesia, who were previously outsourced.
The nation's central bank is taking these measures as an effort to protect customers and the credibility of the banking industry, and went as far as telling Citibank to suspend executives involved. It has also said that if any crimes are found it will revoke Citibank's operating license.
Citi has said it is cooperating fully with police to determine if the collection agency staff had followed its code of conduct on debt collection and that it did not believe physical harm was done to the client.
Citibank, having been a big loser in the collapse of the U.S. housing market, has pushed hard since the 2008 financial meltdown to boost profits overseas, particularly in booming Asia.
California Law Prohibits Debt Collectors From Harassing Consumers
Certain states, like California have state laws that regulate creditors and debt collectors, and incorporate the federal law above. See California Civil Code 1788 et seq., California Civil Code 1788.17, Alkan v. Citimortgage, 336 F. Supp. 2d 1061 (N.D. Cal. 2004), and Gonzales v. Arrow (9th Cir., September, 2011).
Thus, creditors, like Citibank, attempting to collect debts here in California must abide by these laws (the California Fair Debt Collection Practices Act) and cease communicating with consumers once they know the consumers are represented by a lawyer.
Our law office protects consumers being harassed by debt collectors. We are investigating claims against Citibank. If you are being contacted by Citibank, or any other creditors, give us a call at 408-296-0400.
