Finance

Debtors should pay less collection fees

If creditors fear that they will not see their money again, they commission debt collection services to collect the money. These often demand horrendous fees. The Federal Government now wants to change that.

According to the will of the federal government, debtors should in future have to pay lower collection fees. The cabinet decided on a corresponding regulation on Wednesday. “Anyone who overlooks an invoice can quickly get into a debt collection procedure,” said Federal Minister of Justice Christine Lambrecht (SPD).

The fees charged would often be disproportionate to the actual effort and the amount of the claim. “With the new law, we will cut fees and put an end to this unfair practice.” The Bundestag still has to approve the changes.

For claims between 50 and 500 euros, which according to the ministry make up about 60 percent of all cases, 27 euros would still be due in the future. So far, an average of EUR 59.40 has been requested if the claim is settled upon the first warning letter. In a newly introduced, lower value level up to 50 euros, 18 euros would then still be due.

Collection agencies should provide early information about costs

It is also envisaged that consumers will have to find out at the time the contract is concluded or at the latest when they receive a reminder which collection costs they may incur if they are in default. Before delinquent debtors agree to a payment agreement, such as an installment payment, they should also be informed about the costs involved.

This is because a so-called settlement fee is often claimed, which according to the ministry is at least EUR 67.50. In the lowest value level up to 50 euros, this fee should drop to 31.50 euros, with higher amounts it should remain largely unchanged.

If creditors commission both a collection service and a lawyer to collect outstanding amounts, they will only be allowed to invoice the costs for one of them in the future.

Better awareness of debt

In addition, the plans are to provide information about the legal consequences of admitting debt. According to the ministry, collection service providers often make the conclusion of a payment agreement dependent on such an admission.

As a result, however, debtors usually lose the opportunity to raise objections to the claim. According to the Ministry, creditors in Germany commission debt collection companies to collect debts of around EUR 23 million annually.

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