How can you determine whether the collector's actions are legal?

03/19/2021 The Verkhovna Rada of Ukraine adopted the Law on Combating Collectors (No. 4241).

Pursuant to the Law, a collection company is defined as a legal entity (including a financial institution) that, in the interests of a creditor and/or a new creditor, in accordance with an agreement with such a creditor and/or a new creditor, settles overdue debts and is included in the Register of Collection Companies, which will be conducted by the National Bank of Ukraine.

The law establishes requirements for creditors, including debt collection companies, when settling overdue debts, namely:

• comply with requirements for ethical behavior and rules of interaction with the debtor;

• to inform the debtor about the involvement of the collection company in the settlement of the overdue debt and/or assignment of the claim to the new creditor;

• conclude contracts only with legal entities included in the Register of collection companies;

• notify the National Bank of Ukraine about concluding an agreement with the collection company (within the terms and procedure determined by the National Bank of Ukraine);

• monitor the actions of the involved collection companies and provide recommendations for the elimination of violations;

• the obligation to terminate the contract with the collection company unilaterally in case of its exclusion from the Register of collection companies or in case of violation by it of the requirements for ethical behavior (2 or more times per year).

The law also establishes requirements for interaction with the consumer (his representative) during the settlement of overdue debt (requirements for ethical behavior), which can take place by:

• direct interaction (personal or telephone negotiations);

• sending messages (text, voice and other messages, including without the involvement of employees through the use of software);

• sending postal items (at the place of residence or at the place of work).

Now, collectors cannot threaten, blackmail, for example by leaving the group, mislead about interest and penalties, call the borrower or his relatives, neighbors or colleagues.

It is strictly prohibited to report debt to relatives of MFI clients.

The collector is obliged to introduce himself, to inform the name of the company and the amount of the debt, broken down by interest, the body of the loan and penalties. And at the consumer's request, he must provide supporting documents within 7 days.

The bank is obliged to inform the borrower with which collection companies it works.

If collectors violate the Law, the following liability arises: a fine (51,000 - 102,000 UAH), exclusion from the register, criminal liability, loss of the right to engage in the collection business.