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ACM takes action against debt collection agencies

The Netherlands Authority for Consumers and Markets (ACM) has imposed a fine on debt collection agency Credit Invest, better known as De Nederlandse Incassocentrale, and on its executive. ACM has imposed a total fine of EUR 415,000 on this company for exerting pressure on consumers to pay invalid bills. In addition, ACM has accepted a commitment made by debt collection agency Intrum Justitia. This company has promised that its methods will be consumer-oriented.

Bernadette van Buchem, Director of ACM’s Consumer Department, comments: “Debt collection often involves vulnerable consumers. We take action against debt collection agencies that do not comply with the rules. That is how we wish to reduce the problems consumers have with debt collection agencies.”

Fine and commitment

ACM has imposed a fine of EUR 375,000 on Credit Invest, better known as De Nederlandse Incassocentrale, also operating under names such as Credit Pay, MKBusiness and Stichting Derdengelden Incasso Service, and a fine of EUR 40,000 on its de facto executive. The company demanded that consumers pay for invalid agreements. If consumers refused to pay or asked for more information about these bills, the company then continued to urge consumers repeatedly to pay their bills. The company failed to provide any information about the bills, not even when consumers challenged the bills’ legal validity. In most cases, these bills concerned unsolicited subscriptions, such as to discount and coupon services.

De Nederlandse Incassocentrale threatened consumers with legal action and high collection and legal fees. Consumers often felt coerced to pay the incorrect claims eventually. Consumers have the right to know what bill the debt collection agency is collecting, and whether or not that claim is correct. De Nederlandse Incassocentrale has already filed an objection against ACM’s decision. An investigation of the Dutch Public Prosecution Service (OM) into this company is still ongoing. ACM has shared information from its investigation with the OM.\

Intrum Justitia has made a commitment to ACM that it will no longer exert pressure on consumers to pay their bills by threatening to use powers it does not have. Furthermore, the company also said it would accurately inform consumers about bills, it would improve its reachability with regard to questions and complaints, and that it would use a more personalized approach, which would better match the personal financial situations of individual consumers. Prompted by complaints filed by consumers, ACM had launched an investigation into debt collection agency Intrum Justitia. This commitment is not without any obligations. If Intrum Justitia fails to honor the commitment, ACM will have the option of imposing a fine. The substance of this commitment may inspire other debt collection agencies to adopt more consumer-oriented methods, too.

Comprehensive approach to debt collection problems

ACM opted for employing a comprehensive approach to the problems in the debt collection sector. ACM has used educational instruments to empower consumers, and has given debt counsellors useful tools. Furthermore, ACM has reminded the clients of debt collection agencies of their responsibilities. This comprehensive approach is supported by the conclusions from a study that ACM had commissioned into the motives of debt collection agencies, and to what extent they explain the choice for their collection strategies: either aggressive or facilitating / social. Based on the conclusions from this study, ACM has decided, going forward, to focus primarily on debt collection agencies that deliberately ignore the rules.