In April last year, the Netherlands introduced new regulations for debt collection agencies under the Debt Collection Services Quality Act. Since its enactment, the Justice and Security Inspectorate has been conducting inspections to monitor compliance.
The Inspectorate has now published its findings and conclusions from the first nine months of oversight. Inspections of 17 debt collection service providers revealed that none of the organisations met the legal requirements at the time of review. This conclusion is further reinforced by reports, signals, and inquiries submitted to the Inspectorate.
Communication between debt collection service providers and debtors is the primary area of concern. The findings highlight the following issues:
We advise debt collection service providers to critically review all existing communication. Legislators expect communication to be complete, accurate, and written in clear, comprehensible language. Realistic follow-up steps may be included, but measures intended solely as threats are unacceptable.
In the first year of oversight, the focus was on gathering information and providing guidance to ensure compliance with laws and regulations. During inspections, the Inspectorate clarified how it interprets open norms.
From 1 January 2025, debt collection service providers are expected to have aligned their processes with the applicable regulations. The Inspectorate will adopt a stricter enforcement approach from this date, acting more swiftly against violations.
Implementing new laws and regulations can be challenging. Organisations must gain a thorough understanding of the new legal requirements and interpret them correctly. Subsequently, existing policies and procedures need to be revised and embedded within the organisation.
An essential step in this process is assessing compliance with the new legal requirements. The pitfall here is often relying on current practices as a starting point. However, new legislation frequently aims to change existing practices, often raising the bar. Open norms, in particular, carry the risk of being interpreted too literally. It is crucial to consider the intended purpose of the legislation when interpreting these norms. Thinking from the perspective of the legislator’s and regulator’s objectives can be highly beneficial. In our experience, an external and independent perspective often adds significant value.
At Projective Group, we have extensive experience with implementing new laws and regulations. Our experience working with and for regulators allows us to integrate supervisory expectations into implementation projects, ensuring you comply with applicable regulations the first time. We are happy to assist you further.
