Police issue guidelines on vehicle repossession by leasing firms

The Sri Lanka Police have intervened to clarify the framework governing vehicle repossession, establishing guidelines that balance the rights of financial institutions with consumer protections. The police directive addresses growing concerns about the procedures followed by leasing and finance companies when recovering assets from clients who have defaulted on loan payments.

According to the police clarification, leasing and finance companies must adhere to established legal protocols when seeking to repossess vehicles or equipment. The guidelines underscore that while financial institutions have legitimate rights to recover their assets, these actions must be conducted within the bounds of the law and with appropriate legal authorization.

The police have emphasized that repossession activities cannot involve unlawful seizure or actions that violate citizens' rights. Companies must follow proper procedural steps, which typically include providing notice to borrowers and pursuing legal remedies through appropriate channels before taking possession of vehicles.

The clarification comes as concerns have mounted among consumers regarding aggressive or improper repossession tactics. The police guidance is intended to ensure that both lenders and borrowers understand their respective legal obligations and rights in default situations, reducing disputes and ensuring that all parties operate within the legal framework established by Sri Lankan law.