New Law Prohibits Credit Card
Issuers In Costa Rica From Harassing
Deadbeats
The new Reglamento de Tarjetas de Crédito
that went into effect last week, prohibits
banks and financial institutions and any
other issuer of credit card not to "acosar"
(harass) by telephone their customers and
families who are behind on their credit card
payments.
The law was introduced to put an end to the
"abusive" practice, as the Ministerio de
Economía, Industria y Comercio (MEIC) calls
it, of credit card issuers to call deadbeat
customers, as well as their families and/or
employers or any other person not directly
related to the debt, to recover.
Cinthya Zapata, director of the Comisión de
Apoyo al Consumidor del MEIC, explained that
once a card issuer calls an employer or a
brother of the debtor, for example, the card
issuer is involving parties outside the
contractual relationship between the credit
card holder, guarantor of the debt and the
card issuer.
As expected the financial institutions are
not too happy with this, saying that not
being able to call on late payers will mean
higher default rates and higher costs.
As such the Asociación Bancaria
Costarricense (ABC) is getting ready to
challenge the law in court, with an expected
filing before the Sala IV (Constitutional
Court).
The new law went that into effect on March
27, 2010, by way of article 35 , is clear
that no collection arrangements should be
made with persons other than the debtor or
his guarantor. And further, article 18,
limits the number of calls to deadbeat
customers to three.
The ABC feels the law is "unconstitutional",
that the prohibition is negative for card
issuers to collect on what is owed to them.
María Isabel Cortés, the executive director
of the ABC, says that a legal action could
be started as early as this week and that
the new law who affect providing services to
clients with low income, which is estimated
at 37%, a group that has the highest default
rate.
Cortés argues that the low income group will
have to resort to an "informal" economy and
to the detriment of the banking process.
Banking officials have another argument,
saying that the regulation should be within
the powers of the Superintendencia General
de Entidades Financieras (Sugef) -
Superintendent of Financial Institutions -
and not the MEIC. |
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