Dozens of calls, threats, pressure, and letters resembling court documents: what collectors are not allowed to do with debtors

Overdue credit does not mean that a person loses their rights. However, in practice, many borrowers after the first missed payments face not only reminders about the debt but also psychological pressure. Dozens of phone calls throughout the day, threatening messages, attempts to contact relatives or employers, and sometimes even letters that outwardly resemble court summons or enforcement service documents. All this creates the impression that the debtor is practically defenseless.

However, Ukrainian legislation establishes completely different rules. The activities of collection companies today are under state control, and the ways they interact with consumers are clearly defined by law. The mere fact of debt existence does not give the creditor or collector the right to use any methods of influence on a person.

Which law regulates the activities of collectors

The rules for the operation of collection companies in Ukraine were radically changed after the entry into force of Law of Ukraine No. 1349-IX dated March 19, 2021, which amended the Law of Ukraine "On Consumer Lending." This law for the first time legislatively regulated the activities of collection companies and introduced state control over their work.

Key requirements today are contained in Article 25 of the Law of Ukraine "On Consumer Lending", which defines the procedure for settling overdue debt and establishes mandatory rules of ethical conduct for lenders, new creditors, and collection companies.

Additionally, the procedure for interaction with consumers is detailed in the Regulation on establishing additional requirements for interaction with consumers of financial services during the settlement of overdue debt, approved by the Board of the National Bank of Ukraine Resolution No. 79 dated July 9, 2021. The National Bank of Ukraine maintains the Register of collection companies, supervises their activities, and has the right to apply measures against violators—from written warnings to exclusion from the register.

What collectors are allowed to do

There is a widespread belief that collectors can do almost anything to force a person to repay a debt. In reality, their powers are significantly limited by law. The main task of a collection company is to inform the debtor about the existence of overdue debt and offer ways to voluntarily settle it. They may call, send letters, electronic messages, or contact by other means provided by law and the credit agreement. However, each such interaction must comply with the requirements of Article 25 of the Law of Ukraine "On Consumer Lending".

During the first contact, a representative of the collection company is obliged to state their full name, the name of the legal entity on whose behalf they act, indicate the creditor or new creditor in whose interests the debt settlement is carried out, and provide information about the amount of overdue debt. If the interaction is automated, the consumer must be informed about the use of an automated system.

Equally important is that the debtor has the right to request documents confirming the right to claim. If the credit was transferred to another company, the new creditor or collector must provide confirmation of such transfer of rights and a detailed calculation of the debt. The law sets specific deadlines for providing this information, and refusal to provide it may indicate a violation of legal requirements.

At the same time, not every company calling demanding repayment has the legal right to engage in collection activities. According to the requirements of the Law of Ukraine "On Consumer Lending," overdue debt settlement can only be carried out by legal entities included in the Register of collection companies maintained by the National Bank of Ukraine. If a company is not in this register, its activities may be illegal.

Therefore, during the first conversation, it is worth asking the representative to name the full company name and then check its presence in the open NBU Register.

Such a simple check often helps to understand whether you are dealing with a legitimate market participant or persons merely posing as collectors.

When collectors cross the line of the law

Article 25 of the Law of Ukraine "On Consumer Lending" establishes a whole list of actions that are explicitly prohibited during the settlement of overdue debt. First and foremost, the law prohibits any manifestations of psychological pressure. Collectors are not allowed to threaten physical violence, damage to property, eviction, seizure of property without a court decision, or criminal liability solely due to the existence of credit debt. Another common violation is misleading the debtor.

Representatives of collection companies often call themselves police officers, prosecutors, court officials, or state enforcement officers, although the law strictly prohibits this. Another serious violation is sending letters or messages designed to create the impression of the initiation of enforcement proceedings or issuance of a court decision.

The use of state symbols, names of government authorities, inscriptions such as "summons," "enforcement document," "urgent notice of recovery," or "eviction notice" is not allowed unless such documents come from the relevant government authority.

It is worth noting that the law also limits the ways of communication with the debtor. Representatives of collection companies are not allowed to call or send messages from 8:00 p.m. to 9:00 a.m., nor contact a person more than twice a day unless initiated by the debtor themselves.

The law also protects a person's right to privacy. Collectors are prohibited from collecting information about the place of work, health status, vacation schedule, movements, social media posts, or other personal data unrelated to the execution of the credit agreement. Such actions may simultaneously violate the requirements of the Law of Ukraine "On Personal Data Protection."

Can collectors come to the home and call relatives

One of the most common questions among borrowers is whether representatives of collection companies have the right to come to the home or communicate with family members. Article 25 of the Law of Ukraine "On Consumer Lending" establishes that interaction with the debtor must be carried out exclusively in the manner prescribed by law, with compliance with ethical conduct requirements. Personal meetings are allowed only with the prior consent of the consumer. In other words, a collector has no right to come to a person's residence without prior agreement, wait near the house, or try to enter the apartment.

Rules regarding contacts with third parties are no less strict. Relatives, friends, neighbors, or employers are not parties to the credit agreement, so their involvement in debt settlement is allowed only in cases explicitly provided by law. If collectors start calling parents, spouses, children, colleagues, or employers solely to psychologically pressure the debtor, such actions may indicate not only a violation of the Law "On Consumer Lending" but also illegal processing of personal data.

Moreover, a third party has the right to declare a prohibition on the use of their personal data during the first phone call. After that, the creditor or collection company must immediately cease any contact with that person.

Can collectors threaten with court, property seizure, or criminal liability

Another common method of psychological pressure is messages about alleged "opening of a criminal case," "urgent property seizure," "dispatch of enforcement service," or "freezing all accounts tomorrow." In most cases, such messages have nothing to do with the law.

A collection company is not a law enforcement agency, does not conduct pre-trial investigations, and has no authoritative powers. It cannot: seize property, describe an apartment or car, block bank accounts, evict a person from housing, open criminal proceedings, or confiscate property. All these measures are possible only after a court hearing and within enforcement proceedings according to the Law of Ukraine "On Enforcement Proceedings."

Therefore, any statements such as "property will be taken tomorrow," "the police are already on their way," or "if you don't pay today, a criminal case will be opened" are manipulations that directly contradict the requirements for ethical conduct during the settlement of overdue debt.

Where to turn if collectors violate the law

If a creditor or collection company systematically violates the rules established by law, it is not enough to only verbally ask them to stop calling. The law provides several effective ways of protection.

First of all, it is worth collecting all possible evidence. These may be audio recordings of phone conversations, screenshots of messages, photos of letters, call logs indicating the time and number of contacts. After that, it is advisable to file a complaint with the National Bank of Ukraine. The NBU, according to the Law of Ukraine "On the National Bank of Ukraine," exercises state supervision over the activities of lenders and collection companies.

The regulator has the right to conduct inspections, demand explanations, apply measures of influence, impose fines, temporarily prohibit certain types of activities, and exclude companies from the Register of collection companies.

Complaints can be submitted through the official NBU website, email, contact center, or in writing. If the actions of collectors include signs of threats of physical violence, extortion, property damage, or illegal dissemination of personal data, it is also necessary to contact the National Police.

Supreme Court practice

The Supreme Court has already noted that during the settlement of overdue debt, the creditor or collection company must act strictly within the requirements of Article 25 of the Law of Ukraine "On Consumer Lending."

For example, in the ruling of the Cassation Civil Court within the Supreme Court dated March 7, 2024, in case No. 487/3170/22, the court thoroughly analyzed the rules of interaction between the creditor and the consumer during debt collection.

The Supreme Court emphasized that during the first contact, the creditor, new creditor, or collection company must inform the debtor about the creditor, the amount of overdue debt, and other information explicitly provided by Article 25 of the Law of Ukraine "On Consumer Lending."

Furthermore, if interaction is carried out with third parties, information about the debt may be communicated only with the consent of the consumer. Therefore, phone calls to relatives, employers, or acquaintances with notifications about the debt without the debtor's consent may indicate violations of the law and be grounds for filing a complaint with the National Bank of Ukraine.

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