In previous articles, the differences between debt collection activities and debt reclamation services were made clear. In particular, currently, debt collection is still allowed by the laws. However, this activity is still under the control of the law and has limits. How to collect debt legally? When are debt collection acts considered illegal? The above legal questions will be answered in the article “Illegal debt collection actions.”
1. Publicizing the debtor’s image and information without the debtor’s consent
When the debtor fails to pay the debt on time, the creditor usually publicizes the debtor’s images and information immediately, such as the address of residence, workplace, name, age, date of birth, and identity. Moreover, images and information of the debtor’s family and relatives are also publicized by creditors on social networks or in public. Notably, all of these actions are not agreed upon by the debtor. This action can be considered one of the most common illegal collection actions that creditors often do when the debtor fails to pay the debt on time.
Unfortunately, this behavior is not allowed by the law. It is a typical illegal debt-collection action. Specifically, disclosing the debtor’s images and information is arbitrarily distributing information to a third party without the consent of the personal information owner. It will be sanctioned administratively in Clause 2, Article 84 of Decree 15/2020/ND-CP “Regulations on sanctioning of administrative violations in the field of the post, telecommunications, electronic radio frequencies, information technology, and electronic transactions” (“Degree No. 15”).
Not only that, the one who distributes information without the consent of the information owner may be prosecuted for criminal liability according to Point b, Clause 1, Article 288 of the Criminal Code 2015 (amended and supplemented in 2017) on the crime of Illegally giving or using the information on computer networks or telecommunications networks if the conditions are met to constitute a crime.
2. Insulting, defaming the honor and dignity of the debtor are illegal debt collection actions
The second act is also common. The creditor insults and smears the debtor’s honor and dignity when the debtor fails to pay on time. It is also one of the illegal debt collection actions.
Creditors should note that although the debtor has violated the civil agreement, it does not mean that the creditor has the right to insult or smears the debtor. In fact, many criminal cases appear because the creditor swears and uses vulgar words toward the debtor. As a result, the creditor could not recover the debt and was denounced by the debtor for violating the law. Acts of insulting or defaming the debtor’s honor and dignity will be sanctioned administratively according to Point a, Clause 3, Article 7 of Decree 144/2021/ND-CP “Regulations on sanctioning of administrative violations in the field of social security, order, and safety; prevention of social evil; fire protection; rescue; domestic violence prevention and control” (“Decree No. 144”).
Besides, the act of insulting, and defaming the debtor’s honor and dignity may be prosecuted for criminal liability under Article 155 of the Criminal Code 2015 for the crime of Humiliating other people.
3. Calling or contacting the debtor’s acquaintances to request payment on behalf of the debtor are illegal debt collection actions
Calling or contacting the debtor’s acquaintances, friends, and family to ask them to pay the debt on behalf of the debtor is a typical illegal debt-collection action of financial companies. When the financial company cannot make the debtor pay the debt because the debtor does not have solvency, the company contacts people who know the debtor to ask them to pay the debt.
This behavior has been prohibited by Circular 18/2019/TT-NHNN “Amendment and supplementation of some articles of Circular No. 43/2016/TT-NHNN dated December 30th, 2016 of the Governor of the State Bank of Vietnam on Regulations on consumer lending by financial companies” (“Circular No. 18”).
In essence, the debtor is the only party that must pay the debt to the entitled party. Therefore, the entitled party must not require unrelated persons to pay the debt on behalf of the debtor. If the debtor wants to transfer the payment obligation, it must be the consent of the debtor, the assignee, and the entitled party. Then, the entitled party has the right to request the receiving party to pay the debt.
4. Threatening to use violence or using violence or destroying the debtor’s property
Not only in debt collection but in any case, the act of threatening to use violence or using violence or destroying others’ property is always illegal. However, in many cases, creditors often lose control of their emotions and take actions such as smashing, cursing, and using violence to force the debtor to pay the debt.
It violates the provisions of Point d, Clause 4, Article 12 of Decree No. 144 because of using violence, threatening to use violence, or using other measures that are not permitted by law to collect debts; or Point c, Clause 4, Article 15 of Decree No. 144 for destroying or intentionally damaging other people’s property.
In addition, using violence can be prosecuted for criminal liability under Article 134 of the Criminal Code 2015 for the crime of Intentionally causing injury if the debtor has a bodily injury rate of 11% or more. The one who destroys property can be brought into account for criminal liability under Article 178 of the Criminal Code 2015 for the crime of Destruction or intentionally damaging property if the damaged property costs VND 2,000,000 or more.
5. Calling to request payment constantly, annoyingly
The last illegal debt collection action is calling for payment multiple times per day and has no time limit. It is also a common violation of financial companies. Companies often contact and disturb debtors late at night or early morning.
The behavior has been officially prescribed in Clause 7, Article 1 of Circular No. 18. Financial companies are only allowed to remind debts up to 5 times per day and the time limit for reminding debts must be in the period from 7 a.m to 9 p.m. Excessive debts reminders or outside the stipulated period are illegal debt collection actions.
Above are the five most common illegal debt collection actions that creditors and financial companies often mistake. Debt collectors should pay attention to avoid these behaviors to not “lose lock, stock, and barrel.” TNTP hopes this article is helpful to you.