New ACM toolkit makes it easier to take action against unfair debt collection practices
The Netherlands Authority for Consumers and Markets (ACM) today launched an online toolkit that makes it easier for debt counsellors to take action against unfair debt collection practices on behalf of their clients. With these tools, they are able to give their clients certainty quickly about their rights with regard to debt collection, and explain how their clients are able to exercise those rights.
With the toolkit, debt counsellors are able to do the following:
- checking whether a claim is correct;
- assessing whether the collection fees and interest comply with the law;
- finding out whether pressure in collection letters goes too far or not;
- making use of sample letters to take action against unfair debt collection practices.
The toolkit can be found on www.acm.nl/incasso (in Dutch). ACM has launched this toolkit because it turned out that debt collection agencies and firms that collect debts themselves do not always comply with the Dutch Act on the Standardization of Extrajudicial Collection Costs (in Dutch: Wet ter Normering Buitengerechtelijke Incassokosten, or Wik) and the Dutch Unfair Commercial Practices Act. Collection fees are sometimes too high or claims are not correct. Other times, collection letters are unclear or pressure goes too far.
Reaching vulnerable consumers
In late-2016, ACM, together with the Netherlands Authority for the Financial Markets (AFM) and ConsuWijzer, ACM’s consumer information portal, launched the awareness campaign ‘Debt collection? Only pay if the facts are correct’ (in Dutch: ‘Incasso? Betaal, maar alleen als het klopt’). This campaign was aimed at consumers who were able to take action against unfair debt collection practices themselves. With this initiative, ACM reaches out to consumers who are less self-reliant through intermediaries such as debt counsellors, social workers, personal-finance counsellors, and budget counsellors.
Combatting unfair debt collection practices together
The social consequences of unfair debt collection practices have received a lot of media coverage recently. In the development of the toolkit, ACM consulted with debt counsellors so that it satisfied their needs as well as those of clients as much as possible. Marco Florijn, Chairman of the Dutch Association for Debt Counselling and Social Banking NVVK, comments: “Debt counsellors welcome ACM’s initiative. Debt collection often goes wrong, and fees can become unnecessarily high. With this tool, it will be easy to check what the correct fees are. A well-informed debt counsellor can give anyone a run for their money.”
About the toolkit
The online toolkit contains tools that produce quick and personalized answers to questions about your rights regarding debt collection problems. For example, there is a Collection Fee Calculation Tool to calculate the maximum collection fees and interest that a collection agency is allowed to charge. With the Collection Letter Checklist, you can easily check whether a collection agency or firm complies with the other rules on debt collection. In addition, there are sample letters that you can use to exercise your rights. As the composition of the group of people that are active as debt counsellor is broad and diverse, the toolkit also includes educational material. It enables debt counsellors to train new colleagues in the field of debt collection legislation. Finally, there is a ‘report’ button to submit indications about unfair collection practices. Such indications help ACM take enforcement action against firms that violate the rules.
Tackling problems in the debt collection sector
ACM wants the debt collection sector to adjust its behavior in a structural manner. To that end, ACM has chosen for a three-pronged approach:
- Taking enforcement actions against debt collection agencies that do not comply with the rules;
- Remind clients of debt collection agencies of their responsibility in delegating debt collections. This is what ACM recently did in the telecom sector as well;
- Offer tools to consumers to take action themselves against unfair or incorrect claims.