Our good intentions: ethical collection of unpaid invoices!

One of the first news items of 2023 is Minister Vincent Van Quickenborne’s good intention to make the fight against the so-called debt industry a priority. He is referring to clarifying the cost structure of bailiffs, as well as reducing their intervention fees, and protecting people already in debt mediation. “The idea is to distinguish between people who do not want to pay, and those who cannot pay.” In short, ethical collection of unpaid invoices. A fine intention, although it could be even more ambitious!

What can the Ministry of Justice improve to promote ethical amicable collection?

We pool our experience and concerns mainly together with the findings of the recent report (Poverty and Justice, 2022) of the FPS Justice in collaboration with POD Social Integration, and those of Test-Aankoop as already described in an earlier article on our website.

The same monitoring authority

There is no ‘independent’ control authority for bailiffs yet. We have been waiting impatiently for several years for the FPS Economy to expand its competence as a control authority for all actors involved in amicable debt collection. To date, the FPS Economy can only monitor collection agencies; lawyers and bailiffs who perform the same collection activities are (wilfully) excluded.

• The above-mentioned report describes the following in this regard: “[…] Moreover, the disciplinary procedure [v.d.r. the bailiffs’ own ‘supervisory organ’], and especially the fate and outcome of complaints lodged with the competent authorities, although it has been the subject of a major reform, seems far from convincing in terms of its effectiveness and efficiency. On the contrary, they continue to feel that the profession is ‘unpunishable’ or even untouchable.”[1] It equally stresses the importance of extending the FPS Economy’s control to bailiffs and lawyers in the context of amicable recovery[2]

However, there is a need for such an independent control body. Justice, politics, the media, etc. usually only enter into dialogue with the bailiffs. The debt collection sector often gets no hearing, but is mentioned in the same breath as bailiffs when problems arise. However, Test-Aankoop published the observation in 2015 that – since the 2002 Law on Amicable Recovery – problems with debt collection agencies have decreased, but problems with bailiffs who collect amicably have just increased.

• These problems are often related to the exuberant fees charged by bailiffs when collecting unpaid invoices amicably. Costs that often even completely violate the Amicable Recovery Act.
• “One of the main problems concerns the application of Section 5 of the Act, which regulates the costs and fees that can be charged to the consumer in case of recovery. The principle is that it is not for the consumer to pay the debt collector on whom the creditor has relied to collect his or her debt. Therefore, only the amounts agreed in the contract from which the debt arises may be claimed from the consumer. Any other fee or compensation is excluded. Thus, those agreed amounts only serve to cover the amount of the debt, reminder fees, costs for default notices by the creditor, negligence interest, penalty clause as stipulated in the agreement between the company and the consumer.

• When the law came into force, some bailiffs, taking advantage of the lack of clarity on its scope of application, did not hesitate to charge consumers, without justification, a series of costs that were directly related to their intervention: summons fees, deposit fees, recovery fees, filing fees, etc.”[3]

Delineation of duties of bailiffs

In addition, more courage is needed from the Ministry of Justice to delineate the duties of judicial officers, and question their range of activities.

It is difficult for debtors to distinguish between the bailiff in his capacity as ministerial official and the judicial officer in his role of amicable debt collector. For the same reason, Test-Aankoop also rightly raised the question of whether the bailiff can cumulate these two roles.

• The aforementioned report articulates this issue as follows: “In short, a person with a mandate function, vested with public authority, sometimes performs public functions, sometimes private functions, and does so in an independent and impartial manner both towards the parties and the State. The judicial officer’s statutory ambivalence is surprising. This ambivalence takes on an added dimension in the context of debt recovery. Indeed, this is a service provided both privately (through the amicable phase) and publicly (through the judicial phase), both cumulated in the function of judicial officer.”[4]
• […]”As a result, debtors give in more easily to pressure or do not use the possible remedies available to them.“[5]
• […] “Since the judicial officer is financially dependent on the resolution of the dispute, there is obviously a significant risk of losing any impartiality, breaking the rules of fairness, proportionality and independence. With these observations, it cannot be denied that the judicial officer profession is at an important turning point in its history.”

“It is difficult for debtors to distinguish between the bailiff in his capacity as ministerial official and the judicial officer in his role of amicable debt collector“

Besides the confusing ambivalence of the judicial officer profession, as well as the additional fees they charge, there is also the question of whether there is a need for judicial officers as amicable debt collectors? It was the desire of bailiffs to extend their duties to amicable recovery as well as debt mediation.

• To compete with debt collection agencies, the laws regulating our industry are being broken. Only contractual/legal fees and interest may be charged. However, bailiffs also charge debtors who are already struggling with their costs as well as those that are actually up to the creditor to bear.
• The current debt mediation structures are already proving their worth and, above all, are free for debtors. According to the report, debt mediation initiatives by bailiffs such as MyTrustO and Modero One do not add value and also entail pitfalls. These initiatives also mainly target debtors with real repayment options. MyTrustO is not free, “this service entails costs for the debtor, namely EUR 150 for opening the file and preparing the financial document, plus a monthly management fee of more or less EUR 50. The amount varies depending on the size of the file.”[7]
• Modero One, a communication platform and collaboration between bailiffs’ office Modero and the OCMW of Antwerp, aims to facilitate the exchange of personal data between the two organisations, but it involves a lot of risks and thus raises just as many questions. “The question arises as to what the added value and importance of these projects is, knowing that through the procedures of debt mediation and collective debt settlement we have an arsenal that, despite some pitfalls, has proven its usefulness for many years. Would it not be more appropriate and relevant to improve and strengthen the resources of these two procedures instead of establishing yet another procedure at the risk of multiplying the number of remedies that in fact pursue the same objectives and deprive the debtor of the solutions available to him?”[8]

So is it not mainly the economic need of the bailiff himself, and not the societal need, that is satisfied through his intervention?

• “The recovery of debts (especially amicable ones) has become the predominant and even essential activity that enables the judicial officer to exercise his office and, consequently, ensure the viability and economic sustainability of his profession. Faced with intensified competition, the profession recognises its excesses and perverse effects. Indeed, that situation places the judicial officer in an economic dependence that may undermine his impartiality, his integrity and his general duty of information.
• Thus, some resort to ‘no cure, no pay’ type agreements, which cover the entire recovery procedure (amicable and judicial), even though they violate the provisions of the Judicial Code and are censured by the National Chamber of Judicial Officers. Because of this practice, the judicial officer proposes a fixed rate per file. In the event of the debtor’s insolvency, the creditor pays only the lump sum. In the case of solvency, the judicial officer recovers directly from the debtor the costs of his intervention, which he values arbitrarily (frequency of actions, amounts claimed, attempts at enforcement …).”[9]

How do we ethically collect unpaid invoices?

An ethical way of collecting, that should not be an empty slogan! Of course, our raison d’être is economic. But given the human impact of our actions, it is incredibly important to safeguard the dignity of each person. The Centre for the fight against poverty, insecurity of existence and social exclusion, articulates poverty as follows: “poverty undermines the dignity and equal and inalienable rights of all human beings”.

Like Minister van Quickenborne, we make the distinction between being unable and unwilling to pay. What can we do for both groups, as well as creditors? Where do we provide the big difference from the way bailiffs work? The following features underline our way of amicably collecting unpaid invoices.

Free amicable follow-up

Unlike bailiff initiatives like MyTrustO, we do not charge opening costs, follow-up costs, administrative costs, etc. for the amicable follow-up of files (including payment plans).

So we do not burden the most vulnerable group with extra costs, and politicians as well as the government still do not seem to understand that. Politicians like to debate issues such as poverty and debt collection fervently, but in doing so we lack the necessary knowledge and substantiation needed to have a constructive dialogue about our sector. Examples eagerly cited about rising and skyrocketing costs are plucked from the actions taken by bailiffs and have nothing to do with our operation. You can read more info on this in this article.

“we do not burden the most vulnerable group with extra costs”

Professional operation

We offer a listening ear to both debtor and creditor. We try to reach a compromise with clear and concrete language.

Our staff are legally literate, and therefore have sufficient knowledge to reduce and deminish payment conflicts to their essence. This is how we arrive at the most opportune solution for both parties.

Punctual follow-up of legislation

We punctually follow all legislation in line with our sector. For example, we do not add ‘collection costs’, as we are often accused of doing when people confuse us with bailiff firms. We only collect legal and/or contractual costs and interest. We do not pass on costs to debtors that are up to the creditor to pay.

In addition, we work in full GDPR compliance, debtor and creditor privacy is fully guaranteed thanks to our secure online platform. Penetration tests are also carried out regularly to test the performance of security.

Engaging in an amicable solution

Our core business is to obtain an amicable solution, far away from legal proceedings and courts. That is what we do everything we can.

Many debtors ask why they should cooperate with us, we would have no legal jurisdiction. True, we cannot legally force debtors to pay. But that is precisely where our strength lies, we are often the last amicable chance to avoid legal costs. So seize them!

Avoiding unnecessary costs

We try to be as cost-effective as possible, thus avoiding unnecessary costs to debtor (debtor) and creditor (creditor).

The amicable internal actions are completely free of charge, any cost considered (amicable visit, IOS procedure, standard legal procedure) is clearly communicated. We mainly try to stay away from costly and drawn-out procedures.

Transparent operation

We work as transparently as possible for both parties. Debtors can contact us at any time via mail/phone with their questions. We always try to answer them as correctly as possible or refer them to other bodies if necessary.

Creditors have 24/7 access to our platform and can follow up the actions made, consult documents,… . We also advise them very openly about the chances of success of an amicable or legal procedure.

For more info on our help in collecting unpaid invoices, do not hesitate to contact us at s.dereze@tcm.be or 0498292914.

[1] Armoede en justitie in België (2022), p. 271

[2] Armoede en justitie in België (2022), p. 315

[3] Armoede en justitie in België (2022), p. 293

[4] Armoede en justitie in België (2022), p. 274

[5] Armoede en justitie in België (2022), p. 297

[6] Armoede en justitie in België (2022), p. 278

[7] Armoede en justitie in België (2022), p. 307

[8] Armoede en justitie in België (2022), p. 310

[9] Armoede en justitie in België (2022), p. 278

6/01/2022

Our good intentions: ethical collection of unpaid invoices!

One of the first news items of 2023 is Minister Vincent Van Quickenborne’s good intention to make the fight against the so-called debt industry a priority. He is referring to clarifying the cost structure of bailiffs, as well as reducing their intervention fees, and protecting people already in debt mediation. “The idea is to distinguish between people who do not want to pay, and those who cannot pay.” In short, ethical collection of unpaid invoices. A fine intention, although it could be even more ambitious!

What can the Ministry of Justice improve to promote ethical amicable collection?

We pool our experience and concerns mainly together with the findings of the recent report (Poverty and Justice, 2022) of the FPS Justice in collaboration with POD Social Integration, and those of Test-Aankoop as already described in an earlier article on our website.

The same monitoring authority

There is no ‘independent’ control authority for bailiffs yet. We have been waiting impatiently for several years for the FPS Economy to expand its competence as a control authority for all actors involved in amicable debt collection. To date, the FPS Economy can only monitor collection agencies; lawyers and bailiffs who perform the same collection activities are (wilfully) excluded.

• The above-mentioned report describes the following in this regard: “[…] Moreover, the disciplinary procedure [v.d.r. the bailiffs’ own ‘supervisory organ’], and especially the fate and outcome of complaints lodged with the competent authorities, although it has been the subject of a major reform, seems far from convincing in terms of its effectiveness and efficiency. On the contrary, they continue to feel that the profession is ‘unpunishable’ or even untouchable.”[1] It equally stresses the importance of extending the FPS Economy’s control to bailiffs and lawyers in the context of amicable recovery[2]

However, there is a need for such an independent control body. Justice, politics, the media, etc. usually only enter into dialogue with the bailiffs. The debt collection sector often gets no hearing, but is mentioned in the same breath as bailiffs when problems arise. However, Test-Aankoop published the observation in 2015 that – since the 2002 Law on Amicable Recovery – problems with debt collection agencies have decreased, but problems with bailiffs who collect amicably have just increased.

• These problems are often related to the exuberant fees charged by bailiffs when collecting unpaid invoices amicably. Costs that often even completely violate the Amicable Recovery Act.
• “One of the main problems concerns the application of Section 5 of the Act, which regulates the costs and fees that can be charged to the consumer in case of recovery. The principle is that it is not for the consumer to pay the debt collector on whom the creditor has relied to collect his or her debt. Therefore, only the amounts agreed in the contract from which the debt arises may be claimed from the consumer. Any other fee or compensation is excluded. Thus, those agreed amounts only serve to cover the amount of the debt, reminder fees, costs for default notices by the creditor, negligence interest, penalty clause as stipulated in the agreement between the company and the consumer.

• When the law came into force, some bailiffs, taking advantage of the lack of clarity on its scope of application, did not hesitate to charge consumers, without justification, a series of costs that were directly related to their intervention: summons fees, deposit fees, recovery fees, filing fees, etc.”[3]

Delineation of duties of bailiffs

In addition, more courage is needed from the Ministry of Justice to delineate the duties of judicial officers, and question their range of activities.

It is difficult for debtors to distinguish between the bailiff in his capacity as ministerial official and the judicial officer in his role of amicable debt collector. For the same reason, Test-Aankoop also rightly raised the question of whether the bailiff can cumulate these two roles.

• The aforementioned report articulates this issue as follows: “In short, a person with a mandate function, vested with public authority, sometimes performs public functions, sometimes private functions, and does so in an independent and impartial manner both towards the parties and the State. The judicial officer’s statutory ambivalence is surprising. This ambivalence takes on an added dimension in the context of debt recovery. Indeed, this is a service provided both privately (through the amicable phase) and publicly (through the judicial phase), both cumulated in the function of judicial officer.”[4]
• […]”As a result, debtors give in more easily to pressure or do not use the possible remedies available to them.“[5]
• […] “Since the judicial officer is financially dependent on the resolution of the dispute, there is obviously a significant risk of losing any impartiality, breaking the rules of fairness, proportionality and independence. With these observations, it cannot be denied that the judicial officer profession is at an important turning point in its history.”

“It is difficult for debtors to distinguish between the bailiff in his capacity as ministerial official and the judicial officer in his role of amicable debt collector“

Besides the confusing ambivalence of the judicial officer profession, as well as the additional fees they charge, there is also the question of whether there is a need for judicial officers as amicable debt collectors? It was the desire of bailiffs to extend their duties to amicable recovery as well as debt mediation.

• To compete with debt collection agencies, the laws regulating our industry are being broken. Only contractual/legal fees and interest may be charged. However, bailiffs also charge debtors who are already struggling with their costs as well as those that are actually up to the creditor to bear.
• The current debt mediation structures are already proving their worth and, above all, are free for debtors. According to the report, debt mediation initiatives by bailiffs such as MyTrustO and Modero One do not add value and also entail pitfalls. These initiatives also mainly target debtors with real repayment options. MyTrustO is not free, “this service entails costs for the debtor, namely EUR 150 for opening the file and preparing the financial document, plus a monthly management fee of more or less EUR 50. The amount varies depending on the size of the file.”[7]
• Modero One, a communication platform and collaboration between bailiffs’ office Modero and the OCMW of Antwerp, aims to facilitate the exchange of personal data between the two organisations, but it involves a lot of risks and thus raises just as many questions. “The question arises as to what the added value and importance of these projects is, knowing that through the procedures of debt mediation and collective debt settlement we have an arsenal that, despite some pitfalls, has proven its usefulness for many years. Would it not be more appropriate and relevant to improve and strengthen the resources of these two procedures instead of establishing yet another procedure at the risk of multiplying the number of remedies that in fact pursue the same objectives and deprive the debtor of the solutions available to him?”[8]

So is it not mainly the economic need of the bailiff himself, and not the societal need, that is satisfied through his intervention?

• “The recovery of debts (especially amicable ones) has become the predominant and even essential activity that enables the judicial officer to exercise his office and, consequently, ensure the viability and economic sustainability of his profession. Faced with intensified competition, the profession recognises its excesses and perverse effects. Indeed, that situation places the judicial officer in an economic dependence that may undermine his impartiality, his integrity and his general duty of information.
• Thus, some resort to ‘no cure, no pay’ type agreements, which cover the entire recovery procedure (amicable and judicial), even though they violate the provisions of the Judicial Code and are censured by the National Chamber of Judicial Officers. Because of this practice, the judicial officer proposes a fixed rate per file. In the event of the debtor’s insolvency, the creditor pays only the lump sum. In the case of solvency, the judicial officer recovers directly from the debtor the costs of his intervention, which he values arbitrarily (frequency of actions, amounts claimed, attempts at enforcement …).”[9]

How do we ethically collect unpaid invoices?

An ethical way of collecting, that should not be an empty slogan! Of course, our raison d’être is economic. But given the human impact of our actions, it is incredibly important to safeguard the dignity of each person. The Centre for the fight against poverty, insecurity of existence and social exclusion, articulates poverty as follows: “poverty undermines the dignity and equal and inalienable rights of all human beings”.

Like Minister van Quickenborne, we make the distinction between being unable and unwilling to pay. What can we do for both groups, as well as creditors? Where do we provide the big difference from the way bailiffs work? The following features underline our way of amicably collecting unpaid invoices.

Free amicable follow-up

Unlike bailiff initiatives like MyTrustO, we do not charge opening costs, follow-up costs, administrative costs, etc. for the amicable follow-up of files (including payment plans).

So we do not burden the most vulnerable group with extra costs, and politicians as well as the government still do not seem to understand that. Politicians like to debate issues such as poverty and debt collection fervently, but in doing so we lack the necessary knowledge and substantiation needed to have a constructive dialogue about our sector. Examples eagerly cited about rising and skyrocketing costs are plucked from the actions taken by bailiffs and have nothing to do with our operation. You can read more info on this in this article.

“we do not burden the most vulnerable group with extra costs”

Professional operation

We offer a listening ear to both debtor and creditor. We try to reach a compromise with clear and concrete language.

Our staff are legally literate, and therefore have sufficient knowledge to reduce and deminish payment conflicts to their essence. This is how we arrive at the most opportune solution for both parties.

Punctual follow-up of legislation

We punctually follow all legislation in line with our sector. For example, we do not add ‘collection costs’, as we are often accused of doing when people confuse us with bailiff firms. We only collect legal and/or contractual costs and interest. We do not pass on costs to debtors that are up to the creditor to pay.

In addition, we work in full GDPR compliance, debtor and creditor privacy is fully guaranteed thanks to our secure online platform. Penetration tests are also carried out regularly to test the performance of security.

Engaging in an amicable solution

Our core business is to obtain an amicable solution, far away from legal proceedings and courts. That is what we do everything we can.

Many debtors ask why they should cooperate with us, we would have no legal jurisdiction. True, we cannot legally force debtors to pay. But that is precisely where our strength lies, we are often the last amicable chance to avoid legal costs. So seize them!

Avoiding unnecessary costs

We try to be as cost-effective as possible, thus avoiding unnecessary costs to debtor (debtor) and creditor (creditor).

The amicable internal actions are completely free of charge, any cost considered (amicable visit, IOS procedure, standard legal procedure) is clearly communicated. We mainly try to stay away from costly and drawn-out procedures.

Transparent operation

We work as transparently as possible for both parties. Debtors can contact us at any time via mail/phone with their questions. We always try to answer them as correctly as possible or refer them to other bodies if necessary.

Creditors have 24/7 access to our platform and can follow up the actions made, consult documents,… . We also advise them very openly about the chances of success of an amicable or legal procedure.

For more info on our help in collecting unpaid invoices, do not hesitate to contact us at s.dereze@tcm.be or 0498292914.

[1] Armoede en justitie in België (2022), p. 271

[2] Armoede en justitie in België (2022), p. 315

[3] Armoede en justitie in België (2022), p. 293

[4] Armoede en justitie in België (2022), p. 274

[5] Armoede en justitie in België (2022), p. 297

[6] Armoede en justitie in België (2022), p. 278

[7] Armoede en justitie in België (2022), p. 307

[8] Armoede en justitie in België (2022), p. 310

[9] Armoede en justitie in België (2022), p. 278

6/01/2022