Collecting secrets: new laws to make collectors’ work more transparent

Debt collectors may soon be given access to the bank account info of persistent non-payers.

A measure allowing such access was proposed by Russia’s Ministry of Economic Development. As Russia’s debt market rapidly expands, officials believe that it is important to raise the degree of protection for all participants in the deal – creditors, debtors and collectors alike.

Among the bits of information destined for access are the size of the debt and the specific grounds provided by the person who asks for the loan. Giving away this kind of information, officials say, does not breach bank secrecy regulations.

Both collectors and bankers support the initiative, saying the measure will ease their work.

There has been a spike in debt collectors’ unpopularity in Russia since the financial crisis hit. There have been widespread media reports about people who have been harassed and intimidated by debt collectors – sometimes over the phone, sometimes right in their face.

Russia’s Economic Ministry recently started to impose regulations on Russia’s rapidly expanding debt market, promising to protect defaulters from abuse by rogue collectors. They argue that the entire Russian collection market has already developed, and that as it has gotten more and more complicated, there have been gaps in the laws regulating the process.

Such a legal vacuum, officials say, generates certain risks for the stability of the market. There is nobody and nothing to control the collection agencies and collectors, especially concerning their relations with debtors and obtaining legal information about them.

“Now there are fewer debtors in Russia in comparison with previous years,” Alexander Fedorov, chairman of the board of directors at the USB Center Debt Collection Agency, told RT. “And in many cases these are willful debtors who haven’t been paying during a long period of time. Still, on the whole in Russia, 11 percent of those who take out credit never return the money. I think we are in the top five countries with the highest number of debtors who never pay their way. I link it to financial ignorance and some of our national qualities, which are laziness and relying on a bit of luck.”

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