What does Circular No. 18/2019/TT-NHNN provide regarding debt collection activities by finance companies?
Circular No. 43/2016/TT-NHNN (“Circular 43”), as amended and supplemented by Circular No. 18/2019/TT-NHNN (“Circular 18”), sets out specific regulations governing debt reminder activities in consumer lending conducted by finance companies. These regulations limit the number of debt reminders calls that may be made, prescribe the permitted hours for contacting borrowers, and prohibit threats, harassment, or contacting individuals who are under no obligation to repay the debt.
1. What is Circular 18 on debt collection, and why is it important?
Many people mistakenly believe that Circular No. 43/2016/TT-NHNN (as amended and supplemented by Circular No. 18/2019/TT-NHNN) governs all debt collection activities carried out by businesses. However, pursuant to Articles 1 and 2 of the Circular, it applies solely to consumer lending activities conducted by finance companies and governs the entities involved in such activities, including finance companies, borrowers, and other related organizations and individuals.
Accordingly, the debt reminder and debt collection provisions under the Circular do not apply generally to all businesses or all debt collection activities. Instead, they apply exclusively to consumer lending provided by finance companies. For example, debt recovery services performed by law firms under legal service agreements or the collection of commercial debts arising from business transactions between enterprises fall outside the scope of this Circular. It should be noted that where a finance company authorizes a law firm to conduct debt reminder or debt collection activities relating to consumer loans, the law firm acts as the finance company’s authorized representative. Accordingly, the debt reminder activities are carried out in the name of the finance company and must comply with the provisions of the Circular.
Previously, the law merely allowed finance companies to adopt debt recovery measures without imposing specific limits on the number of reminder calls or restricting contact with borrowers’ relatives. As a result, many individuals received repeated phone calls, while persons with no repayment obligation were nevertheless disturbed. To address these issues, Point (d), Clause 2, Article 7 of Circular 43 introduced detailed regulations governing debt reminder activities. These provisions are intended both to safeguard the legitimate debt recovery rights of finance companies and to protect the lawful rights and interests of borrowers.
2. Regulations on debt reminder calls under Circular 18
One of the key amendments introduced by Circular 43, as amended and supplemented by Circular 18, is the limitation on the number of debt reminder calls that a finance company may make each day. Pursuant to Point (d), Clause 2, Article 7 of Circular 43 (as amended by Clause 7, Article 1 of Circular 18), a finance company may issue debt reminders no more than five (05) times per day. The method and timing of debt reminders shall be agreed upon by the parties in the consumer loan agreement, provided that such agreement complies with applicable laws. This limitation is intended to prevent borrowers from being subjected to excessive phone calls that may cause psychological pressure or disrupt their daily lives and work. By restricting debt reminder activities to a maximum of five times per day, the Circular seeks to ensure that debt collection is conducted in a lawful and professional manner rather than becoming a form of harassment or unlawful coercion.
In addition to limiting the number of reminder calls, Circular 43 (as amended and supplemented by Circular 18) also specifies the permissible time frame during which debt reminders may be made. Pursuant to Point (d), Clause 2, Article 7 of Circular 43 (as amended by Clause 7, Article 1 of Circular 18), although the parties may agree on the timing of debt reminders in the loan agreement, such reminders may only be made between 7:00 a.m. and 9:00 p.m. This requirement is intended to protect borrowers’ right to rest and maintain their normal daily lives while preventing debt reminder practices from unnecessarily intruding upon their personal time. Accordingly, any debt reminder calls made before 7:00 a.m. or after 9:00 p.m. are inconsistent with the applicable legal requirements.
Furthermore, although Circular 43 (as amended and supplemented by Circular 18) recognizes debt collection as a legitimate right of finance companies, it does not permit finance companies to employ any means necessary to compel borrowers to make payment. Under Point (d), Clause 2, Article 7 of Circular 43 (as amended by Clause 7, Article 1 of Circular 18), debt reminder and debt collection measures must not include threatening or intimidating borrowers.
At the same time, debt collection activities must be carried out professionally and in compliance with the law. Pursuant to Clause 7, Article 10a of Circular 18, finance companies are responsible for training and supervising their employees to ensure compliance with legal requirements and professional ethics. Accordingly, any conduct involving threats, insults, intimidation, or psychological pressure against borrowers is prohibited.
3. May finance companies contact borrowers’ relatives to collect debts under Circular 18?
Point (d), Clause 2, Article 7 of Circular 43 (as amended by Clause 7, Article 1 of Circular 18) expressly provides that finance companies must not send debt reminders, pursue debt collection, or provide information relating to debt recovery to any organization or individual who has no repayment obligation, except where disclosure is requested by a competent state authority in accordance with law. Parents, spouses, children, siblings, friends, or colleagues of a borrower are not automatically liable for repayment of the borrower’s loan merely because of their relationship with the borrower. Unless they are the borrower, a guarantor, or another party with repayment obligations under the relevant agreement, they bear no legal responsibility for the outstanding debt.
Accordingly, if a finance company repeatedly contacts a borrower’s relatives demanding that they repay the debt on the borrower’s behalf, threatens to continue disturbing them unless the loan is settled, or otherwise pressures them into making payment, such conduct is inconsistent with the applicable legal framework. Similarly, finance companies may not request that relatives, friends, or colleagues provide the borrower’s new telephone number, address, or other contact information, nor may they ask such persons to relay payment demands to the borrower, as these individuals have no legal obligation in relation to the debt.
However, this prohibition does not mean that finance companies are absolutely prohibited from contacting persons who have no repayment obligation under all circumstances. For example, where a borrower has designated a reference person during the pre-disbursement verification process or where a competent state authority lawfully requests relevant information, such contact may be made within the limits permitted by law.
It should be noted that Circular 18 does not specifically regulate communications with reference persons during the debt collection process. Therefore, any such contact must comply with the legal requirements governing the protection of customer information and must not be conducted in a manner prohibited under Point (d), Clause 2, Article 7 of Circular 43 (as amended and supplemented by Circular 18).
4. What should you do if you receive unlawful debt collection calls?
Firstly, borrowers should retain all available evidence relating to unlawful debt collection practices. Such evidence may include call logs, call recordings (where available), text messages, emails, or any other documents demonstrating that the finance company has made debt reminder calls exceeding the permitted frequency, contacted the borrower outside the legally permitted hours of 7:00 a.m. to 9:00 p.m., or communicated with persons who have no repayment obligation. Such evidence may serve as an important basis for filing a complaint or requesting the competent authorities to investigate and address the violation.
Secondly, when sufficient evidence has been collected, the borrower should submit a complaint directly to the finance company requesting that it investigate the matter and cease the unlawful conduct. Pursuant to Clauses 5 and 6, Article 10a of Circular 18, finance companies are responsible for receiving and resolving customer complaints. Complaints relating to debt reminder measures, debt collection activities, or demands for payment made against persons who have no repayment obligation must be addressed within 48 hours. For other types of complaints, the finance company must respond within seven (07) working days from the date of receipt.
Finally, if the finance company fails to resolve the complaint or continues to engage in unlawful debt collection practices, the borrower may submit a complaint or report the matter to the competent authorities. Pursuant to Article 10b of Circular 18, the Banking Inspection and Supervision Agency and the provincial or municipal branches of the State Bank of Vietnam are responsible for conducting inspections, supervising finance companies, and handling or recommending the handling of violations within their respective authority. This regulatory mechanism helps safeguard borrowers’ lawful rights and interests while ensuring that debt collection activities are carried out in compliance with applicable laws.
5. FAQs about Circular 18
5.1. Is it unlawful for a finance company to make more than five debt reminder calls in a single day?
Pursuant to Point (d), Clause 2, Article 7 of Circular 43, as amended and supplemented by Circular 18, a finance company may issue debt reminders no more than five (05) times per day. This limitation applies to debt reminder and debt collection activities arising from consumer loan agreements between finance companies and borrowers.
Accordingly, where a finance company or its authorized representative repeatedly places calls exceeding the statutory limit in an attempt to pressure a borrower into making payment, such conduct may constitute a violation of the applicable regulations. In such circumstances, borrowers are advised to retain call logs, call recordings, or other relevant evidence for the purpose of submitting a complaint.
5.2. Is it lawful for a finance company to make debt reminder calls after 9:00 p.m.?
Under Point (d), Clause 2, Article 7 of Circular 43, as amended and supplemented by Circular 18, although the parties may agree on the timing of debt reminders in the loan agreement, debt reminder activities may only be conducted between 7:00 a.m. and 9:00 p.m.
Accordingly, making debt reminder calls before 7:00 a.m. or after 9:00 p.m. falls outside the time frame permitted by law, even where the borrower has an overdue debt. If such conduct occurs repeatedly, the borrower may request the finance company to cease the violation and exercise the right to lodge a complaint in accordance with Article 10a of Circular 18.
5.3. What should you do if you have never borrowed money but continue receiving debt reminders calls?
Point (đ), Clause 2, Article 7 of Circular 43, as amended and supplemented by Circular 18, expressly provides that finance companies must not send debt reminders, pursue debt collection, or disclose debt collection information to organizations or individuals who have no repayment obligation, except where disclosure is required by a competent state authority in accordance with law.
Accordingly, if an individual is neither the borrower, a guarantor, nor another person legally responsible for the debt, that individual has the right to request that the finance company immediately cease contacting them. The individual should also retain evidence of the calls or messages for the purpose of filing a complaint. If the finance company continues to harass the individual or unlawfully discloses information relating to the loan, the matter may be reported to the State Bank of Vietnam or another competent authority for consideration and appropriate action.
5.4. Are borrowers’ relatives required to provide the borrower’s new telephone number or address?
Current Vietnamese law does not require a borrower’s relatives to provide the borrower’s telephone number, address, or other updated contact information to a finance company. Where an individual has no legal obligation in relation to the loan, that person is entitled to refuse to provide such information and may request that the finance company discontinue any further contact.
If the finance company nevertheless continues to contact or harass that individual, they should preserve the relevant evidence and file a complaint in accordance with the applicable legal procedures.
Circular No. 43/2016/TT-NHNN, as amended and supplemented by Circular No. 18/2019/TT-NHNN, establishes a clear legal framework governing debt reminder and debt collection activities conducted by finance companies in connection with consumer lending. Understanding these regulations enables borrowers to better appreciate their legal rights and obligations while helping to prevent unlawful debt collection practices.
Where a borrower receives debt reminders that do not comply with the applicable legal requirements or becomes involved in a dispute relating to debt collection activities, TNTP Lawyers is available to assist by reviewing the relevant documents, assessing the legality of the debt collection measures, advising on appropriate legal solutions, representing clients in complaint procedures, and protecting their lawful rights and interests in accordance with Vietnamese law.
Sincerely,
