Settlement of overdue debt: what is changing in the "collector-debtor" relationship

The problem of knocking out debts from citizens by methods that are effective, but unethical and questionable from the standpoint of the law, has found its solution at the legislative level. Collection companies will enter into the register and establish certain rules, the implementation of which will be monitored by the National Bank.

The President signed Law No. 1349-IX "On Amendments to Certain Laws of Ukraine on Consumer Protection in the Settlement of Overdue Debts" (adopted on March 19 by the Verkhovna Rada on the basis of draft No. 4241 dated October 21, 2020).

The document changes the laws “On the National Bank of Ukraine”, “On financial services and state regulation of financial services markets”, “On consumer lending”.

In particular, the definition of the concepts of "settlement of overdue debt" and "collection company" is given.

The latter is a legal entity that, in the interests of the lender (the original creditor) and / or the new creditor, in accordance with the agreement, is entitled to settle the overdue debt. A prerequisite for the activity is inclusion in the register of collection companies, the maintenance of which is entrusted to the National Bank of Ukraine.

The National Bank will also oversee compliance by collection companies with legislation on the protection of the rights of consumers of financial services, including ethical requirements for interaction with consumers in the settlement of overdue debts.

So, among the limitations of the toolkit for influencing the behavior of the debtor is a direct prohibition to inform third parties who are not a party to the consumer lending agreement, information about the conclusion of such an agreement, its conditions, the status of implementation, the presence of overdue debt and its size. After all, one of the favorite methods of moral pressure today is informing the employer of a problem borrower, as well as his close contacts.

In case of violation by the lender or the collection company of the legislation, the borrower gets the opportunity to file a complaint with the National Bank. The regulator has the right to impose penalties.

The Law on Consumer Lending will have a new section dedicated to the rules for settling arrears. In particular:

- the issue of acquiring the status of a collection company;

- the rights and obligations of the lender, new lender, collection company in the settlement of overdue debt;

- the status of the Register of collection companies;

- requirements for interaction with consumers and other persons in the settlement of overdue debts;

- rules of supervision over compliance with the requirements of the legislation on interaction with consumers, as well as control over the activities of the collection company;

- responsibility for violation of the requirements for ethical behavior.

The law comes into force on the day following the day of its publication, but comes into force only after three months.