On July 23th, 2020, a bill for amending and supplementing of the Consumer Protection Act (the “Bill”) was submitted for voting in the National Assembly.
The Bill proposes for introduction of explicit legal regulation on the actions of the so-called “debt-collectors”, for acquisition of overdue receivables by third parties, assignees and their subsequent management and out-of-court collection proceedings.
Central part in the Bill is played by the prohibiting provision that receivables from consumers cannot be transferred. The Bill provides that such transfer only if the consumer has given prior written consent before the transfer “by means of an explicit individually stipulated clause in the contract”. This requirement is provided for in order to avoid harming consumers through unfair terms for the transfer of receivables in standard consumer contracts or in contracts under general terms and conditions. It does not seem unexpected that in its statement the Association of Debt-Collection Agencies in Bulgaria expresses the opinion that the requirement for explicit consent of the consumer should not be included in the Bill.
In cases where such explicit individually stipulated clause is included in a consumer contract, the receivable may be transferred under the general provisions for assignment – after notification for the transfer addressed to the consumer by the initial creditor. However, the new creditor is not entitled to charge fees, penalties, sanctions and interest which have not been provided for in the consumer contract concluded with the initial creditor.
As well as that, under the Bill it is forbidden both – to partly transfer receivables against consumers, and to transfer one receivable to several creditors. The reasons for adoption of the Bill state that the purpose of this restriction is “to put an end to the vicious practice of separate assigning of principal, interest and costs”, which are subsequently claimed in separate enforcement proceedings, additionally imposing significant costs on consumers. There is a new article providing that receivables against consumers can only be transferred to licensed financial institutions (for example: banks).
A transfer performed in breach of these three restrictions does not affect the consumer and third parties and leads to the imposition of fines or financial penalties.
Due to the aggressive communication approach of debt-collectors towards consumers, the Bill explicitly regulates the communication means. Such communication should always be in person with the consumer or with a person explicitly authorized by the latter in order to prevent possible harming of consumers. The only legal means for non-judicial debt-collection shall be payment invitations and debt-repayment proposals.