Recovering vehicle possessions from lessees in defiance of the law
A massive operation to reclaim vehicles is being carried out by several leasing companies despite new directives from the Central Bank.
“Leasing companies are abusing their authority to take possession of people’s belongings and vehicles. The government is still keeping quiet about the leasing firms’ disregard for the debt moratorium that the Central Bank of Sri Lanka (CBSL) imposed,” Leasing and Loan Installment Payers Association President Asanka Ruwan Pothupitiya said.
The CBSL regulates finance leasing companies. About 1,000 unlicensed financial and leasing establishments exist, according to Mr. Pothupitiya.
He said a letter advising a vehicle owner that he or she is more than ninety days overdue on payments is required under Section 27 of the Lease Financing Act No. 56 of 2000. A second letter informing the vehicle owner of the termination of the contract should be sent seven days after the first letter. After these procedures, a leasing company needs to lodge a complaint with a police station.
"Vehicle seizers do not have the right to reclaim vehicles by intimidating or physically abusing any customer, as has been the case," he said.
The CBSL is the foremost authority that regulates finance leasing companies. About 1,000 unlicensed financial and leasing establishments exist, according to Mr. Pothupitiya.
He said unlawful seizures are taking place with the help of the police, and he singled out the Maharagama and Welikada police divisions.
Referring to a recent incident at Halmillawewa in Bingiriya, the seizers of a leasing company grabbed a motorcycle from a woman with the intervention of a policeman
attached to the Hettipola Police. She has alleged that her leasing firm did not give prior notice.
A similar occurrence was reported recently in the Welikada Police division, where a woman was assaulted by seizers before they took possession of her Wagon R car.
In a recent incident, Jaliya Parakrama, 35, a building contractor, died from injuries he suffered in a brutal attack. The seizers took control of his tipper truck and ran him over before they got away with the vehicle. He had been two months in arrears on his lease payment.
Jaliya’s father, G.D.N. Parakrama, said he has lost his son and the tipper truck, which is to be put up for auction tomorrow.
He said justice had not been done.
Few people can pay the leasing firms the full amount owed, while most have to sell their possessions.
During a recent meeting with high-ranking authorities, the association took up issues its members faced and pointed out how dishonest state officials were colluding with the leasing mafia instead of developing appropriate procedures to shut down these unlawful establishments, Mr. Pothupitiya said.
He also said new measures should be taken to stop seizures by finance companies if customers fall behind on installment payments. It is the state's responsibility to consider bringing in new legislation to protect Sri Lankans who lease vehicles.
Current cases should directly be transferred to the CID, and those responsible ought to face justice, the association insisted.
Meanwhile, police have been directed to look into complaints by lessees and take legal action against financing and leasing companies.
Notwithstanding the issuance of a circular the previous year, concerns have been expressed regarding the surge in forcible vehicle seizures and the police officers’ inaction in response to complaints by lessees.
Police officials who disregard directives would face severe disciplinary action, Police Media Spokesman DIG Nihal Thalduwa said.
He said complaints against police officers were being investigated, and tough action would be taken against them if they had acted outside the law.
The circular was released after last year’s meeting between the Association of Leasing and Debt Installment Payers representatives and the former Inspector General of Police, C.D. Wickramaratne.