The document is designed to safeguard Ukrainian citizens against unethical debt collection practices. Photo from ua.depositphotos.com
Ukrainian President Volodymyr Zelensky has signed a bill into law to amend certain legislative acts to introduce the so-called code of ethics for debt collectors.
The relevant statement was published by the President's Office on its website on April 12.
Read also Lawmakers want to introduce ethics rules for debt collectors in Ukraine The document is designed to safeguard Ukrainian citizens against unethical debt collection practices, it said.
In particular, before concluding a consumer loan agreement, a lender must inform a consumer about the possibility of attracting a collection company in case of non-payment of debt on time. The consumer loan agreement must stipulate the consumer's right to apply to the National Bank of Ukraine (NBU) if the consumer lending legislation is violated.
The document also establishes the requirements for interaction with a consumer (or his/her representative) in the settlement of overdue debt. In particular, during the first communication, a creditor or a collection company must reveal their identity, the name and surname of their representative, the legal basis for the appeal and the amount of overdue debt. Also, at the request of a consumer, they must also provide the relevant documents within seven business days.
The National Bank is empowered to monitor compliance with legislation on the protection of the consumers' rights in the field of financial services by banks, other financial institutions, and collection companies.
The document comes into force the day following the date of its publication.
On March 19, 2021, the Verkhovna Rada, Ukraine's parliament, passed a bill to amend certain legislative acts to introduce the code of ethics for debt collectors.
- On September 20, 2020, the Verkhovna Rada passed a draft law to safeguard financial services consumers' rights, obliging banks to inform potential borrowers about all forthcoming expenses on loans, including additional and related services provided by third parties.
- The bill also introduced the same rules for banks and non-bank financial institutions as regards advertising of financial services.
Translation: Olena Kotova