ABSTRACT
The Netherlands displays one of the highest per capita household debt ratios in the OECD. Despite relatively comprehensive consumer and mortgage credit protection, problematic debt is a vividly felt social issue, as well as a controversial business model. Spiraling payment delays, aggressive debt collection practices, and high fees have characterized the post-financial crisis, generating exclusion patterns that have gained increasing recognition over the past years.
In this context, the role of debt collection agencies has come under scrutiny. In 2015 for the first time, the Financial Markets and Consumer and Competition Authorities joined forces to investigate unfair practices at the hand of incassobureaus (debt collection agencies), observing that they sometimes collected non-existing or unfounded claims, charged unfair fees, and exerted undue pressure on consumers. Since the inquiry, not only have societal and governmental attention to the perils of uncheckered debt collection grown; civil courts have played an unprecedented role via a newly proactive approach to ex officio application of EU consumer law.
Until the early 2010s, the boundaries between formal and informal debt collection in the country were seamless in practice: efficient default (ie in absentia) court proceedings turned into quick debt enforcement procedures, which made it possible for plaintiffs to push an alleged money claim without providing any evidence beyond a written title and without, as a consequence, any substantive scrutiny of the claim. Consumers, perhaps unsurprisingly, hardly ever contested these claims. However, Dutch courts have ‘discovered’ the CJEU’s case law on ex officio application of consumer law and have put an end to the judicial rubber-stamping of such claims – quite prominently, a dedicated form has been introduced to give judges the required elements for a preliminary substantive assessment of cases (potentially involving consumers) brought before them. This form is addressed at ‘repeat claimants,’ such as debt collectors – which can be expected to substantiate their claims properly.
These developments, taken together, beg the question of the future of (formal and) informal debt collection in a country that is at the forefront of substantive credit regulation but struggles to manage the social and societal cost of over-indebtedness. In 2020, the Dutch government has launched a consultation around a proposed bill on ‘quality of debt collection service provision’ (wet kwaliteit incassodienstverlening) which ranges from professional requirements to provision of information and remedies. However, critics were quick to point out that the proposal does little to prevent collection charges from becoming a substantial part of a consumer’s debt burden. Selected aspects of the proposed law will be discussed to explore their added value in addition to the developments described in the first part of the paper, and their position in the European panorama, and in respect of possible harmonization measures.
