[Opinion piece]
Everyone equal before the law in the new bill?
The past few years have seen a rag-tag procession of all kinds of political and legal proposals, some of them more exciting or creative than others. One of the first things I do every morning is reading the day’s programme on the news sites, and the programme of a couple of days ago actually sounded promising. So get the popcorn ready, because this news is a tasty little item! Titles such as “House Committee gets to grips with the debt industry” and “The role of the lawyer in debt collection” registered on my radar and made me prick up my ears.
Three main approaches
PS, sp.a & CD&V tabled a ‘new’ bill in the House to introduce several measures designed to limit debt burden. Well, those of the consumers at least… .
- Once the law becomes effective, consumers should receive the invoice within 7 days. They would then normally be granted a period of 20 days to pay their invoice and, after a (free) letter of reminder, an additional ten days.
- If a consumer is still not willing to pay his debt, collection costs can then be added to that debt. These collection costs are however capped to a maximum of 10% of the capital (for amounts between EUR 400 – EUR 5 000; the percentage goes down if the debt goes up) and may not exceed the effective cost.
- And now for something really new. The bill provides for the adaptation of the powers of inspection of lawyers and bailiffs working in cases of amicable settlement. Once the new law becomes effective FPS Economy will control all actors involved in the amicable collection of debt. The control of lawyers and bailiffs has hitherto always fallen within the ambit of their self-regulation bodies which, according to Test-Achat/Test-Aankoop, are scarcely if anywhere to be seen after complaints filed by consumers or by organizations protecting consumers’ interests.
Like Granny always said: “Thought so!”
I stand before TCM Belgium famous for my ifs and buts, but this draft law needs a head-on BUT!
- It goes without saying that an invoice should reach the user ASAP, but what is to be gained from any further government-side involvement in the determination (and more particularly the extension) of the due payment times? How does this help reduce accumulation of debt? And yet, perhaps such extension in many ways bears comparison with the whole credit card debt saga in America and Canada?
Debtors are here encouraged to purchase goods and services that they cannot really afford, since final payment is merely postponed. Debtors will therefore once again only run the risk of becoming caught up in more cash-flow problems. In some cash-strapped sectors (cf. Bouwunie) short payment time is standard practice. I recently reread the article with the woeful title: “Already more bankruptcies this year than for the whole of 2018”. A measure such as this does not promise much future improvement. Worse, according to the Neutral Trade Union for Self-Employed Persons (Neutraal Syndicaat voor Zelfstandigen – NSZ), one in four of all these bankruptcies are because of late, overdue or non-payers, …
- So, is the law on amicable debt collection and the current consumer protection legislation not sufficient? The legislation already lays down all manner of restrictions so that the debtor will not end up saddled with exorbitant debts, without in any way seeking to destabilize the arrangements between creditor and debtor. Is it then really so outlandishly liberal to think that adult people are in fact quite capable of making wide-awake decisions, entering into agreements, accepting General Conditions, etc.?
The limitation of collection costs arises from the idea that the collection and processing of an invoice/debt ought somehow to be human. But how can amicable collection be anything else? Sp.a House Member Melissa Depraetere whips out a popular, ready-made comeback: “Surely the bill itself can’t make you poor?” Then there’s the (apocryphal) tale of an unpaid bill of 50 euros that suddenly becomes a bill of thousands of euros. I wonder whether Member Depraetere is sufficiently aware of just how amicable debt collection goes about its business. Her predecessors most likely not, so we sent a letter in the (not so distant) past to the policy-makers in question (click here).
A summarizing passage from the letter: “Our main activity focuses on the amicable collection of unpaid invoices. Amicable collection may well have no legal impact, but precisely that is our strength. Debtors are given the opportunity, well away from the courts of law and, ergo, the associated legal costs, to find a realistic solution. Plus which this avoids all manner and form of collection costs being charged to the debtor. Debt collection companies (or any agent collecting debt on an amicable basis, therefore also lawyers and bailiffs acting in that capacity) are, in fact, not legally permitted to add collection/file management costs to the debt that the debtor is required to pay.
For various reasons the client (creditor) regards the service that we offer (which politicians tend to disparage as the “debt industry”) as a value-added (maintenance of its customer relations, avoidance of court costs, swift solution, …) and is prepared to pay for that service, as in any other sector. What is demanded, however, are the costs and interests set out in the creditor’s contract or general conditions or laid down by law.”
Everyone equal before the law
Perhaps I have a partisan view of all these developments, but I worry when politicians helter-skelter into all kinds of makeshifts and expedients. Decisions they hope will bag votes, but that only create many more potential debts in the process. Just try for once to step back from the populist quick fixes and look for real solutions. The concerned sectors and specialists are not even invited to sit at the debating table, even though their (way of) work is at stake. It looks like politics will lend an ear to one side only, the consumer’s.
Correct, the consumer is the vulnerable road user in this political hit and run story and deserves the necessary protection.. But if the country goes into economic meltdown, the consumer has nothing at all to gain from that either. Amicable debt collection helps the engine to keep on running without running up excessive repair costs. Test-Aankoop of all people, the No. 1 consumer interest protector, wants to examine the possible problems in the debt collection sector in finer, more differentiated detail and not tar all actors with the same brush.
What emerges (see article Test-Aankoop 2015)? “Enterprises rely increasingly on third parties for the amicable collection of claimed debts. Some enlist the services of traditional collection companies. [BUT] More and more companies are also engaging lawyers and bailiffs. And that is exactly where many of the problems lie. The experience of Test-Aankoop is that since the Amicable Debt Collection law, the number of problems with collection companies may well be reduced, but the problems with bailiffs active in amicable debt collection remain and even continue to increase”.
Cobbler, stick to your last! This new bill should in any case ensure that anyone wishing to embark on the course of amicable collection must abide by the same rules. Something the debt collection sector has long awaited.
Power of persuasion
However, Test-Aankoop asks another very pertinent question: “Can a bailiff be involved in amicable debt collection?” Many consumers find it difficult to make the distinction between amicable (out-of-court) and legal settlement. Test-Aankoop doubts that control by FPS Economy will be sufficient for “consumers to be no longer intimidated by the figure of the bailiff, no longer confused by the fact that a bailiff also collects debts in connection with non-legal proceedings, for ways to be found to avoid this placing consumers under unwarranted pressure. (…) Test-Aankoop says that this possibility is best forgotten”.
However, it is ‘the’ bailiffs and lawyers who, for some time now, have been trying to acquire the monopoly on amicable settlement, arguing that this more properly falls within the scope of their special powers and expertise. Pleased that the critical note here should come not only from the own debt collection sector, but also from a body such as Test-Achat/Aankoop. Or (unintentionally) from the lawyer’s profession itself, …. Studio Legale, seeming to want to keep the honour all to itself, published “De rol van advocaten bij incasso” – “The Role of the Lawyer in Debt Collection” – on the very same day as the bill was announced. The author uses the general denominator ‘collection’, but it quite soon becomes clear that he/she is talking only about collection through the courts.
“The present position among commercial collection actors and even bailiffs is after all that collection is best dealt with without the presence of a lawyer. Not so, we say. The lawyer still has an important role to play! The best a collection agency can do is to send amicable demands and reminders. (…) In sum, the intervention of a lawyer for the collection of unpaid invoices is not only necessary (in a court case, in a collection of undisputed debts, in the execution of a title), but also more efficient than simply engaging the services of a collection agency. In the end, all they can do is ‘huff and puff’, while lawyers can get down to serious business and enforce solutions.”
The described weakness of amicable settlement is precisely where we see our strength. The amicable collection process allows room for dialogue, where threats are certainly neither necessary nor advisable. Debtors will understand quickly enough that an amicable solution is the best solution, if for no other reason than because it will avoid incurring further substantial (legal) costs.
In cases in which an amicable solution is not actually possible because of a dispute or the like, the services of a lawyer/bailiff might be engaged as a complementary logical next step.
Author: Kim Rutten, Marketing & Communication Manager TCM Belgium, Senior Credit Controller
For further information about the debt collection law in Belgium you can consult our publications on:
Sources:
- “Gedaan met hoge kosten voor onbetaalde facturen? Kamercommissie pakt schuldenindustrie aan” (4/12/19) – Knack
- “Kamer pakt schuldindustrie aan: factuur voortaan binnen de week, eerste herinnering altijd gratis” (4/12/19) – HLN
- “De rol van advocaten bij incasso” (4/12/19) – Studio Legale (Jubel)
(https://www.jubel.be/de-rol-van-advocaten-bij-incasso/)
- “Dit jaar al meer faillissementen dan in heel 2018” (2/12/19) – HLN
(https://www.hln.be/geld/economie/dit-jaar-al-meer-faillissementen-dan-in-heel-2018~aa8325e7/)
- “Kan een gerechtsdeurwaarder wel aan minnelijke invordering doen? Test-Aankoop vindt van niet!” (17/03/15) – Test-Aankoop
[Opinion piece]
Everyone equal before the law in the new bill?
The past few years have seen a rag-tag procession of all kinds of political and legal proposals, some of them more exciting or creative than others. One of the first things I do every morning is reading the day’s programme on the news sites, and the programme of a couple of days ago actually sounded promising. So get the popcorn ready, because this news is a tasty little item! Titles such as “House Committee gets to grips with the debt industry” and “The role of the lawyer in debt collection” registered on my radar and made me prick up my ears.
Three main approaches
PS, sp.a & CD&V tabled a ‘new’ bill in the House to introduce several measures designed to limit debt burden. Well, those of the consumers at least… .
- Once the law becomes effective, consumers should receive the invoice within 7 days. They would then normally be granted a period of 20 days to pay their invoice and, after a (free) letter of reminder, an additional ten days.
- If a consumer is still not willing to pay his debt, collection costs can then be added to that debt. These collection costs are however capped to a maximum of 10% of the capital (for amounts between EUR 400 – EUR 5 000; the percentage goes down if the debt goes up) and may not exceed the effective cost.
- And now for something really new. The bill provides for the adaptation of the powers of inspection of lawyers and bailiffs working in cases of amicable settlement. Once the new law becomes effective FPS Economy will control all actors involved in the amicable collection of debt. The control of lawyers and bailiffs has hitherto always fallen within the ambit of their self-regulation bodies which, according to Test-Achat/Test-Aankoop, are scarcely if anywhere to be seen after complaints filed by consumers or by organizations protecting consumers’ interests.
Like Granny always said: “Thought so!”
I stand before TCM Belgium famous for my ifs and buts, but this draft law needs a head-on BUT!
- It goes without saying that an invoice should reach the user ASAP, but what is to be gained from any further government-side involvement in the determination (and more particularly the extension) of the due payment times? How does this help reduce accumulation of debt? And yet, perhaps such extension in many ways bears comparison with the whole credit card debt saga in America and Canada?
Debtors are here encouraged to purchase goods and services that they cannot really afford, since final payment is merely postponed. Debtors will therefore once again only run the risk of becoming caught up in more cash-flow problems. In some cash-strapped sectors (cf. Bouwunie) short payment time is standard practice. I recently reread the article with the woeful title: “Already more bankruptcies this year than for the whole of 2018”. A measure such as this does not promise much future improvement. Worse, according to the Neutral Trade Union for Self-Employed Persons (Neutraal Syndicaat voor Zelfstandigen – NSZ), one in four of all these bankruptcies are because of late, overdue or non-payers, …
- So, is the law on amicable debt collection and the current consumer protection legislation not sufficient? The legislation already lays down all manner of restrictions so that the debtor will not end up saddled with exorbitant debts, without in any way seeking to destabilize the arrangements between creditor and debtor. Is it then really so outlandishly liberal to think that adult people are in fact quite capable of making wide-awake decisions, entering into agreements, accepting General Conditions, etc.?
The limitation of collection costs arises from the idea that the collection and processing of an invoice/debt ought somehow to be human. But how can amicable collection be anything else? Sp.a House Member Melissa Depraetere whips out a popular, ready-made comeback: “Surely the bill itself can’t make you poor?” Then there’s the (apocryphal) tale of an unpaid bill of 50 euros that suddenly becomes a bill of thousands of euros. I wonder whether Member Depraetere is sufficiently aware of just how amicable debt collection goes about its business. Her predecessors most likely not, so we sent a letter in the (not so distant) past to the policy-makers in question (click here).
A summarizing passage from the letter: “Our main activity focuses on the amicable collection of unpaid invoices. Amicable collection may well have no legal impact, but precisely that is our strength. Debtors are given the opportunity, well away from the courts of law and, ergo, the associated legal costs, to find a realistic solution. Plus which this avoids all manner and form of collection costs being charged to the debtor. Debt collection companies (or any agent collecting debt on an amicable basis, therefore also lawyers and bailiffs acting in that capacity) are, in fact, not legally permitted to add collection/file management costs to the debt that the debtor is required to pay.
For various reasons the client (creditor) regards the service that we offer (which politicians tend to disparage as the “debt industry”) as a value-added (maintenance of its customer relations, avoidance of court costs, swift solution, …) and is prepared to pay for that service, as in any other sector. What is demanded, however, are the costs and interests set out in the creditor’s contract or general conditions or laid down by law.”
Everyone equal before the law
Perhaps I have a partisan view of all these developments, but I worry when politicians helter-skelter into all kinds of makeshifts and expedients. Decisions they hope will bag votes, but that only create many more potential debts in the process. Just try for once to step back from the populist quick fixes and look for real solutions. The concerned sectors and specialists are not even invited to sit at the debating table, even though their (way of) work is at stake. It looks like politics will lend an ear to one side only, the consumer’s.
Correct, the consumer is the vulnerable road user in this political hit and run story and deserves the necessary protection.. But if the country goes into economic meltdown, the consumer has nothing at all to gain from that either. Amicable debt collection helps the engine to keep on running without running up excessive repair costs. Test-Aankoop of all people, the No. 1 consumer interest protector, wants to examine the possible problems in the debt collection sector in finer, more differentiated detail and not tar all actors with the same brush.
What emerges (see article Test-Aankoop 2015)? “Enterprises rely increasingly on third parties for the amicable collection of claimed debts. Some enlist the services of traditional collection companies. [BUT] More and more companies are also engaging lawyers and bailiffs. And that is exactly where many of the problems lie. The experience of Test-Aankoop is that since the Amicable Debt Collection law, the number of problems with collection companies may well be reduced, but the problems with bailiffs active in amicable debt collection remain and even continue to increase”.
Cobbler, stick to your last! This new bill should in any case ensure that anyone wishing to embark on the course of amicable collection must abide by the same rules. Something the debt collection sector has long awaited.
Power of persuasion
However, Test-Aankoop asks another very pertinent question: “Can a bailiff be involved in amicable debt collection?” Many consumers find it difficult to make the distinction between amicable (out-of-court) and legal settlement. Test-Aankoop doubts that control by FPS Economy will be sufficient for “consumers to be no longer intimidated by the figure of the bailiff, no longer confused by the fact that a bailiff also collects debts in connection with non-legal proceedings, for ways to be found to avoid this placing consumers under unwarranted pressure. (…) Test-Aankoop says that this possibility is best forgotten”.
However, it is ‘the’ bailiffs and lawyers who, for some time now, have been trying to acquire the monopoly on amicable settlement, arguing that this more properly falls within the scope of their special powers and expertise. Pleased that the critical note here should come not only from the own debt collection sector, but also from a body such as Test-Achat/Aankoop. Or (unintentionally) from the lawyer’s profession itself, …. Studio Legale, seeming to want to keep the honour all to itself, published “De rol van advocaten bij incasso” – “The Role of the Lawyer in Debt Collection” – on the very same day as the bill was announced. The author uses the general denominator ‘collection’, but it quite soon becomes clear that he/she is talking only about collection through the courts.
“The present position among commercial collection actors and even bailiffs is after all that collection is best dealt with without the presence of a lawyer. Not so, we say. The lawyer still has an important role to play! The best a collection agency can do is to send amicable demands and reminders. (…) In sum, the intervention of a lawyer for the collection of unpaid invoices is not only necessary (in a court case, in a collection of undisputed debts, in the execution of a title), but also more efficient than simply engaging the services of a collection agency. In the end, all they can do is ‘huff and puff’, while lawyers can get down to serious business and enforce solutions.”
The described weakness of amicable settlement is precisely where we see our strength. The amicable collection process allows room for dialogue, where threats are certainly neither necessary nor advisable. Debtors will understand quickly enough that an amicable solution is the best solution, if for no other reason than because it will avoid incurring further substantial (legal) costs.
In cases in which an amicable solution is not actually possible because of a dispute or the like, the services of a lawyer/bailiff might be engaged as a complementary logical next step.
Author: Kim Rutten, Marketing & Communication Manager TCM Belgium, Senior Credit Controller
For further information about the debt collection law in Belgium you can consult our publications on:
Sources:
- “Gedaan met hoge kosten voor onbetaalde facturen? Kamercommissie pakt schuldenindustrie aan” (4/12/19) – Knack
- “Kamer pakt schuldindustrie aan: factuur voortaan binnen de week, eerste herinnering altijd gratis” (4/12/19) – HLN
- “De rol van advocaten bij incasso” (4/12/19) – Studio Legale (Jubel)
(https://www.jubel.be/de-rol-van-advocaten-bij-incasso/)
- “Dit jaar al meer faillissementen dan in heel 2018” (2/12/19) – HLN
(https://www.hln.be/geld/economie/dit-jaar-al-meer-faillissementen-dan-in-heel-2018~aa8325e7/)
- “Kan een gerechtsdeurwaarder wel aan minnelijke invordering doen? Test-Aankoop vindt van niet!” (17/03/15) – Test-Aankoop
Don’t wait another second – collect your money
Focus on your business, we’ll take care of your outstanding payments. Contact us to find out more.
Don’t wait another second – collect your money
Focus on your business, we’ll take care of your outstanding payments. Contact us to find out more.