Proposal for a 9th Consumer Right

In 2014, the Israel Consumer Council (ICC) addressed CI, raising the need for the declaration of a 9th Consumer Right - The Right to a Proper Defense, following a severe case of consumers intimidation and misleading on a large scale, that occurred in Israel that year.

In the above-mentioned case, consumers were facing aggressive procedures of debt- collection, in which large companies used frightening law-firms even before contacting the consumers directly, and without providing any proof of existence of such debt.

In order to explore this issue more globally, ICC turned earlier this year to consumer organizations around the world with the following question: In your country, is it legally allowed for a business (before any judicial proceedings) to send consumers a debt claim or a demand of payment without providing them with any written evidence about the deal and the alleged debt?

Following are the responses of 16 countries:

#	Organization	Country	Is the issue covered by present Law\ Regulations \ Legal provisions	A summary of the response
1	KEPKA	Greece	Yes	Law covers this issue. The law regulates the relations between debtors and collectors, in accordance with consumer protection and the obligation of transparency, integrity of transaction and professional conduct.
2	OCU	Spain	No	There is no law on the subject. Aggressive debt collection practices also exist. The OCU organization considers conducting a campaign on this issue.
3	Consumers Association of Singapore	Singapore	Partly	There is no specific licensing requirement or legislation regulating debt collectors in Singapore. Therefore, the way in which a business may address a consumer about the alleged debt is not regulated (i.e. there is no specific requirement to present written evidence of the alleged debt). However, there is a legal act indirectly relating to the subject. The act regulates lending and addresses the issue of misconduct during debts collection. The consumer may ask for proof of transaction and refuse to pay until he receives proof. In addition, there are other legislations such as the Personal Data Protection Act and the Protection from Harassment Act which would apply to the mode of debt collection.
4	CHOICE - Australian Consumers' Association (Council)	Australia	Partly	A debt collector may contact a consumer to require payment before any judicial proceedings. (A debt collector could be the original credit or service provider collecting the debt or a debt collection agency acting on the creditor's behalf.) However, the debt collector must provide detailed account information, including an itemized account, if so requested by the customer.
5	Consumer NZ	New Zealand	No	There are no laws that would prevent a business from turning to a consumer with a debt claim or a payment demand without providing him or her with written evidence of the deal and the alleged debt.
6	Advisory Council on Consumer Affairs	Finland	Yes	Finland has consumer ombudsman's guidelines for good debt collection practice.  Guidelines require the debt collector to give an explanation and information about the debt. The payment demand must mention at least: • Creditor's name and address • The reason for the debt (section 5 a (2) of the Debt Collection Act). The debt relationship, obligation or agreement on which the debt is based must be detailed sufficiently.
7	Forbrukerradet	Norway	No	It is legally allowed to present a claim, bill or other demand for money without proper evidence regarding the existence of said claim etc. The consumer may at this time deny paying and the firm must address the claim to the regular courts and must present evidence both for the existence and amount of the claim. But a standalone claim for money does not need to be backed up by evidence to be legal.
8	Dr Stamatis Rossides	Cyprus	No	Under contract law applicable in Cyprus, a valid contract normally contains the following basic requirements: Intention to create legal relation, Offer, Acceptance, Consideration, Capacity (the authority and ability to make contracts). The contract must be in writing and the contractor must have a copy of the contract. There is no obligatory pre-trial procedure.
9	National Consumer Law Center	USA	Partly	The Fair Debt Collection Practices Act (FDCPA) governs conduct by debt collectors (but not original creditors).  A debt collector may contact a consumer without first providing written information but then must follow-up on that initial communication with a written notice stating the amount of the alleged debt, the name of the creditor, and informing the consumer that he/she may seek verification of the debt.
10	VZBZ	Germany	Yes*	Debt collection agencies have to register in Germany. This is regulated by Legal Services Act.  Registered persons who provide debt collection services, must, if they make a claim against a private individual, convey clear and understandable explanation with the first assertion of the following information: The demand base, with contracts under concrete exposition of the subject matter hereof and the date the contract was concluded. If they are not registered and act as a debt collection agency, this is an administrative offense which may be punished with a fine. There is a Website where people can check whether a company is registered, or not.
11	ULC	Luxembourg	No	There is no law on the subject.  Everyone, even a business, can send debt claims but the addressee is supposed to claim written evidence if he does not know what it is about.  Nobody is supposed to conform to a simple order to pay if he has no debt.
12	Option Consommateurs	Canada (Quebec and Ontario)	Yes*	In Quebec (article 33 of an Act Respecting the Collection of Certain Debts) and in Ontario (article 21 (1) of the Collection and Debt Settlement Service Act), debt collectors must first send the debtor a notice of claim, in writing.  The notice of claim must contain information prescribed by law such as information on the debt, the contact information of the creditor and the debtor, the permit number and the name of the collection agency. Only five days in Quebec and six days in Ontario after the notice was sent, a debt collector may contact the debtor on the phone. If during the phone conversation, the debtor states that he or she has not received the notice, another notice must be sent. Only after the five or six day delay, the debt collector may contact the debtor again.
13	The Danish Consumer Council - Forbrugerrådet Tænk (Council)	Denmark	Yes*	There is no direct obligation in legislation to provide proof of agreement in the initial stage. On the other hand, it must follow general principles; good marketing practices etc. and no one may send a bill without reference / explanation as to what the debt covers. . Whatever they write (or do not write), the creditor has the responsibility to prove that there is something substantial behind the debt collection. Is goes without saying that consumers should not accept this and should respond that they do not acknowledge the demand. If it comes to “formal” debt collection as such, we have legislation covering this issue. The creditor must first send a formal claim which must cover all information necessary so that the debtor may evaluate the claim.
14	Consumentenbond (Council)	Holland	No	It is not forbidden to ask or urge a consumer to pay an alleged debt without giving written proof in advance. However, you may not present your claim as an aggressive commercial technique. Such techniques are forbidden under our Law on Unfair Commercial Practices. If such a case should come before a court, the aggressor / debt owner without proof has practically no chance. However, consumers should always defend themselves against such accusations; otherwise, they face the risk of being condemned to pay, if the judge thinks the claim is not illegal.
15	DECO	Portugal	No	There is a special procedure for fulfillment of financial obligations, i.e. a simplified lawsuit that seeks to recognize, more quickly, the existence of the debt (bearing in mind that, usually, the lender has to first get a court decision that recognizes the existence of the debt). It is called an injunction. However, despite this procedure, there is no legal obligation that debt collectors have (before any judicial proceedings) to prove the debt claim or the payment demand. It is true that the right to information is applicable, but it is also true that the consumer cannot be legally obliged to pay this debt without a judicial proceeding, in which, despite the injunction process, the trader always has to prove, not only the deal but also the alleged debt.
16	ICC	Israel	No	The issue is not yet covered by the law.  There is a bill promoted by ICC aimed to prevent aggressive collection of money from consumers. The bill imposes obligation on businesses seeking to collect debts to send a registered letter before turning to attorneys, stipulating the name of the business, the details of the debt and the method for calculating this debt, as well as the existence of a transaction or of a debt. Such an obligation will enable consumers to deal with the demand for payment – especially in cases when it is not justified. This proposal would provide the consumer with independent coping tools even before legal proceedings are being undertaken. The bill currently passed the first stage in the parliament.

* ICC comment: Please notice the difference between the initial stage where the business addresses the consumer, and an advanced pre court stage where a debt collection enters the game.

In only 5 of 16 countries, the issue is fully covered by Law\ Regulations \ Legal provisions.

These results establish the need to recognize a new Consumer Right - The Right to a Proper Defense, the right to receive all necessary evidence and documentation needed to verify claims of debts and demands of payments.

ICC is calling CI members to address CI and to back this initiative.