Debt collection that creditors must know under the new law

http://www.smartsme.tv/content/16687

Niti Neungjamnong
Director of Sripathum Law Center

Hello Smart SME and all readers. Now, I can’t talk about this topic. It’s “debt collection”. From now on, I don’t want to say anything, send anything, talk to anyone, or talk to debtors whenever I want. This is because there is currently a law that protects debtors so that creditors can collect debts in accordance with the law and fairly, namely the Debt Collection Act B.E. 2558. It must be admitted that being in debt is something that exists in society all the time, whether it is debt from borrowing, from various expenses, or from gambling. Debts arise from both the formal and informal systems. Having debt is one thing, but the ability to repay debts is another important thing. Because when the debt is due, the creditor has the right to collect that debt. However, each creditor’s debt collection is different. Some are threatening, violent, rude, and humiliate debtors to the point of embarrassment. In this issue, I would like to present the law regarding debt collection according to the Debt Collection Act B.E. 2558.

In the past, there were some types of creditors who had violated the debtor’s privacy by using harsh language, threats, intimidation, violence, or defamation, as well as providing false information and causing annoyance to others. Before the law was passed, debt collection in this form was considered “unfair”, such as threatening to harm, sending documents to the debtor’s workplace, or telling information to the debtor’s friends, employers, or relatives. These things led to the push for this law. Therefore, the forms and methods of debt collection are important matters that creditors need to study and learn in order to collect debts in accordance with the law. Importantly, this law has both civil and criminal penalties.

The following are the main principles, procedures and formats that are prohibited in debt collection and the criminal penalties under the Debt Collection Act B.E. 2558:

1. Debt collectors, all types of creditors, whether legitimate or not, are defined in Section 3 of the Debt Collection Act B.E. 2558.

2. Debt collection business must be registered as a debt collection business as stipulated in Section 5 and the law firm or lawyer shall have the Lawyers Council act as the registrar as stipulated in Section 6 under the Debt Collection Act 2015.

3. Contact hours: Contact can be made between 8:00 a.m. and 8:00 p.m. on public holidays, from 8:00 a.m. to 8:00 p.m., in accordance with Section 9 of the Debt Collection Act 2015.

4. Show evidence of authorization. In cases where debt collectors must show evidence of authorization to receive payment of debt from creditors, it must be specified for debt collection purposes. When the debtor has paid the debt to the debt collector, the debt collector must issue evidence of payment to the debtor, in accordance with Section 9 of the Debt Collection Act B.E. 2558.

5. Contact location: In the case of mail, contact must be made at the location specified by the debtor for debt collection, in cases where the person in question has not notified in advance or the location specified must be at the debtor’s domicile, residence, or workplace, in accordance with Section 9 of the Debt Collection Act B.E. 2558.

6. Characteristics that are prohibited in debt collection are as follows: Threats, violence, or other actions that cause damage to the body, reputation, or property of the debtor or others are severely punishable under Section 41, which has criminal penalties, punishable by imprisonment not exceeding five years.

Or a fine not exceeding five hundred thousand baht, or both, or the use of insulting language, the disclosure of debts of the debtor to others, prohibiting the delivery of documents that clearly express debt collection, including the use of text, symbols, except in the case of notification of mortgage enforcement by means of announcement in newspapers, in accordance with Section 11 of the Debt Collection Act B.E. 2558, in which a violation of Section 11 (2) (3) (4) or (5) is a criminal offense, punishable by imprisonment not exceeding one year or a fine not exceeding one hundred thousand baht, or both, in accordance with Section 39.

7. A debt collector is prohibited from contacting any person other than the debtor, except in cases where such other person is the debtor’s husband, wife, parent or descendant, and such other person has asked the debt collector about the reason for the contact, in which case the debt collector shall provide information about the debt only as necessary and appropriate. Section 8, Debt Collection Act B.E. 2558

8. Debt collection in a false manner, the creditor is prohibited from displaying or using messages, signs, symbols or uniforms that lead to the understanding that it is an action of the court, government officials or government agencies, which is severely punishable under Section 41, which is a criminal penalty, punishable by imprisonment not exceeding five years or a fine not exceeding five hundred thousand baht, or both, or even displaying or having messages that lead to the belief that debt collection is an action by a lawyer, or displaying or having messages that lead to the belief that legal action will be taken, or that assets or salaries will be seized or frozen, or that actions will be taken for a credit information company or hired by a credit information company, Section 12 of the Debt Collection Act B.E. 2558, in which a violation of Section 12 (2), (3) or (4) is a criminal penalty, punishable by imprisonment not exceeding three years or a fine not exceeding three hundred thousand baht, or both, under Section 40.

9. Unfair behavior, charging fees or any expenses in excess of the rate set by the committee, offering or inducing a debtor to issue a check while knowing that the debtor is in a position to not be able to pay the debt, Section 13 of the Debt Collection Act 2015, in which a violation of Section 13 (2) is a criminal offense, punishable by imprisonment not exceeding one year or a fine not exceeding one hundred thousand baht, or both, in accordance with Section 39.

The Debt Collection Act has detailed steps for debt collection that are legal and fair enough, and there will probably be more announcements in the future. One thing I am concerned about is the negative application of this law, especially for debtors who take the opportunity to avoid paying debts to creditors. Moreover, by using this law to threaten or take action against creditors in some cases where creditors may not have acted illegally or unfairly, opening up the opportunity for civil and criminal penalties under the Debt Collection Act of 2015 to this extent may create too much of a burden for creditors, which may lead to more social problems. Finally, I can only hope that creditors will respect the law and not use violence, ridicule, or injustice against debtors, and that debtors will not use this legal principle to threaten creditors for their own improper benefits.