Risk & Compliance

Legal requirements for debt collection activities in effect

Date:April 2, 2024

On April 1, 2024, the Debt Collection Quality Act (DCQA) came into effect after some delay. The law applies to all businesses that carry out debt collection activities or collect debts from individuals on behalf of a third party. Debt collection activities aimed at businesses are exempt. This exception also applies to debt collection activities carried out by businesses for their own claims.

Registration requirement for debt collection service providers

From that moment on, there is a registration requirement for debt collection service providers. Existing debt collection service providers have until April 1, 2025, to obtain their registration. Debt collection service providers wishing to start from April 1, 2024, must first obtain their registration before they can start.

Registration can be submitted to Justis. An online form can be used to demonstrate compliance with the specified requirements. For digitally applying for a license, businesses need ‘eRecognition’. Alternatively, it is possible to submit a paper application.

Requirements for debt collection service provider

The debt collection service provider is required to meet criteria in terms of reliability, expertise, business operations, information provision, and dealing with the debtor. The requirements regarding business operations, information provision, and dealing with the debtor come into effect immediately. For the professional competence requirements, there is a transitional regime for existing debt collection service providers. These legal requirements will come into effect on April 1, 2025. A so-called cumulative scheme will apply for small claims. This means that maximum collection costs apply under specific conditions. This provision will come into effect from October 1, 2024.

Who does the DCQA apply to?

If you collect claims from individuals for third parties, this law is likely to apply to your services. In that case, you must apply for registration within a year.

Please note that a large part of the new requirements is already applicable from April 1, 2024. We advise you to conduct an analysis comparing your current practices with the new legal requirements. Based on identified differences, you can take measures to ensure proper compliance.

Need support?

If you need help applying for registration with Justis or implementing the new legal rules, please contact us. We have years of experience supporting businesses with their license applications, implementing new laws and regulations, and extensive experience with regulators.