Text consolidated by Valsts valodas centrs (State
Language Centre) with amending laws of:
6 June 2019 [shall come
into force on 3 July 2019];
15 June 2021 [shall come into force on 12 July
2021];
8 June 2023 [shall come into force on 15 July
2023];
13 June 2024 [shall come into force on 12 July 2024].
If a whole or part of a section has been amended, the
date of the amending law appears in square brackets at
the end of the section. If a whole section, paragraph or
clause has been deleted, the date of the deletion appears
in square brackets beside the deleted section, paragraph
or clause.
|
The Saeima1 has adopted and
the President has proclaimed the following law:
Law on
Extrajudicial Recovery of Debt
Chapter I
General Provisions
Section 1. Terms Used in the Law
The following terms are used in the Law:
1) borrower - a legal or natural person who has entered
into a credit agreement with a credit institution to which the
requirements of this Law for a non-performing credit agreement
are applicable;
2) outsourcing service provider - a legal person
engaged by a provider of debt recovery services which performs
one or more servicing activities of a non-performing credit
agreement in the name of the provider of debt recovery
services;
3) non-performing credit agreement - a credit agreement
classified as a non-performing exposure in accordance with
Article 47a of Regulation (EU) No 575/2013 of the European
Parliament and of the Council of 26 June 2013 on prudential
requirements for credit institutions and investment firms and
amending Regulation (EU) No 648/2012;
4) creditor - a person who has lawful relations with a
debtor and who, on the basis of a lawful transaction or legal
act, has the right to request the fulfilment of payment
obligations;
5) credit seller - a credit institution which has
granted credit to a natural or legal person to whom the
requirements of this Law for a non-performing credit agreement
are applicable;
6) credit purchaser - a legal person, except for a
credit institution, which, within the scope of its economic or
professional activity, acquires the right to claim arising from a
non-performing credit agreement;
7) debt recovery - an aggregate of extrajudicial
activities used by a creditor or provider of debt recovery
services inviting a debtor to voluntarily fulfil the delayed
payment obligations;
8) provider of debt recovery services - a person who
recovers debts in the name of or on behalf of a creditor within
the scope of commercial activities or professional activities
thereof;
9) debtor - a natural person who has not fulfilled the
payment obligations undertaken thereby under a lawful transaction
or specified in legal acts within the deadline specified in the
lawful transaction or legal act, and who is operating beyond the
scope of the economic or professional activities thereof;
10) debt - payment obligations which have not been
fulfilled within the deadline specified in a lawful transaction
or legal act;
11) home Member State - a European Union Member State
where the legal address or principal undertaking of the provider
of debt recovery services, credit purchaser or its representative
is located;
12) host Member State - a European Union Member State
where the provider of debt recovery services has established a
branch or performs credit servicing activities and also a Member
State where the permanent place of residence or legal address of
the borrower or its principal undertaking is located.
[13 June 2024]
Section 2. Purpose of the Law
The purpose of this Law is to:
1) govern the rights and obligations of a creditor and a
provider of debt recovery services in the field of debt
recovery;
2) ensure justice, commensurability and rationality during the
recovery process;
3) facilitate voluntary payment of a debt;
4) promote the opportunity for third parties to assess the
fulfilment of payment obligations by a natural person;
5) govern the rights and obligations of a credit seller, a
credit purchaser, a provider of debt recovery services and also
an outsourcing service provider in respect of the servicing of
non-performing credit agreements.
[13 June 2024]
Section 3. Scope of Application of
the Law
(1) This Law shall govern the operation of providers of debt
recovery services and prescribe the requirements for a creditor
and provider of debt recovery services in respect of debt
recovery and the creation of a debt history database.
(2) The norms of this Law shall not be applicable to the debt
recovered by a State or local government institution in the field
of public law.
(3) This Law shall not affect the right of a creditor,
provider of debt recovery services or debtor to turn to a court
or an arbitration court. A court or an arbitration court shall
examine civil legal disputes arising from this Law in accordance
with the procedures specified by the Civil Procedure Law.
(4) The norms of this Law regarding the reminder of a creditor
shall be applicable insofar as is not specified otherwise by the
Civil Law.
(5) The rights and obligations of a creditor specified in
Chapter III of this Law shall be applicable if the creditor is
the performer of economic or professional activities.
(6) If the recovery of a debt is directed against a guarantor
who is a natural person and operates beyond the scope of economic
or professional activities thereof, the norms of this Law
governing recovery of a debt from a debtor shall be
applicable.
(7) A cessionary shall effect the recovery of a debt in
compliance with the rights and obligations of a creditor provided
for in this Law. If the cessionary has acquired the right to
claim on the basis of a cession within the scope of its economic
or professional activities, the cessionary shall be subject to
the rights and obligations of a provider of debt recovery
services provided for by this Law.
(8) Chapters VI, VII, and VIII of this Law shall be applicable
in cases where the provider of debt recovery services services of
a non-performing credit agreement.
[13 June 2024]
Section 3.1 Exceptions
for the Servicing of Non-Performing Credit Agreements
The requirement to be licensed in accordance with Section 5,
Paragraph one of this Law in respect of the servicing of
non-performing credit agreements shall not be applicable in cases
where:
1) it is carried out by a credit institution registered in the
European Union;
2) it is carried out by an alternative investment fund
manager, a holding company, or an investment management company
which has obtained an authorisation or has been registered in
accordance with Directive 2011/61/EU of the European Parliament
and of the Council of 8 June 2011 on Alternative Investment Fund
Managers and amending Directives 2003/41/EC and 2009/65/EC and
Regulations (EC) No 1060/2009 and (EU) No 1095/2010, or by a
management company or investment company which has obtained an
authorisation in accordance with Directive 2009/65/EC of the
European Parliament and of the Council of 13 July 2009 on the
coordination of laws, regulations and administrative provisions
relating to undertakings for collective investment in
transferable securities (UCITS), if the investment company has
not selected a management company in the name of the fund it
manages in accordance with the abovementioned Directive;
3) it is carried out by a capital company which has obtained a
special permit (licence) for the provision of consumer credit
services in accordance with Section 8, Paragraph 1.1
of the Consumer Rights Protection Law;
4) the credit agreement has not been entered into by a credit
institution registered in the European Union, except for the case
where the original credit agreement has been replaced by a credit
agreement entered into by such credit institution;
5) a credit institution registered in the European Union
acquires the rights of the creditor arising from a non-performing
credit agreement or the non-performing credit agreement
itself.
[13 June 2024]
Section 4. Supervisory
Authorities
(1) The Consumer Rights Protection Centre (in respect of the
protection of consumer rights) and the Data State Inspectorate
(in respect of the protection of the data of natural persons), as
well as other supervisory and control authorities shall supervise
the compliance with this Law in accordance with the competence
specified in laws and regulations.
(2) When supervising the compliance with this Law, the
Consumer Rights Protection Centre is entitled to request the
information necessary for the performance of its functions from a
debtor, creditor, or provider of debt recovery services, credit
seller, credit purchaser, or outsourcing service provider and
specify the deadline for the submission thereof.
(3) If the Consumer Rights Protection Centre establishes that
the non-compliance with this Law has caused or could cause harm
to the interests of consumer groups (collective interests of
consumers), it is entitled to take the decision by which it
assigns the creditor or provider of debt recovery services,
credit seller, credit purchaser, or outsourcing service provider
to terminate the violation of this Law or to rectify the
violation allowed and to determine the deadline for the
performance of the necessary activities. The procedures by which
the Consumer Rights Protection Centre shall take decisions and
the procedures for appealing these decisions shall be determined
by the Consumer Rights Protection Law and the Unfair Commercial
Practices Prohibition Law.
[13 June 2024]
Chapter
II
Operation of a Provider of Debt Recovery Services
Section 5. Special Permit (Licence)
for Debt Recovery
(1) A provider of debt recovery services is entitled to
recover a debt in the name of or on behalf of a creditor and also
to perform servicing activities of a non-performing credit
agreement in the name of or on behalf of a credit purchaser if it
has registered as a merchant or a performer of professional
activities and has obtained the special permit (licence) for debt
recovery (hereinafter - the special permit (licence)).
(2) The special permit (licence) shall be issued by the the
Consumer Rights Protection Centre.
(3) The requirement referred to in Paragraph one of this
Section shall not be applicable to sworn advocates, an
administrator in accordance with the Covered Bonds Law, and a
servicer if it is an initiator in accordance with the
Securitisation Law.
(4) The Cabinet shall determine the necessary requirements for
a provider of debt recovery services to obtain the special permit
(licence) and also the procedures for the issuance, use,
suspension of operation, and cancellation of the abovementioned
special permit (licence).
(5) A provider of debt recovery services shall pay the State
fee for the issuance of the special permit (licence) and the
supervision of activities of the provider of debt recovery
services. The amount of the State fee and procedures for its
payment shall be determined by the Cabinet.
[15 June 2021; 8 June 2023; 13 June 2024]
Section 6. Reimbursement of Debt
Recovery Expenses
(1) A debtor or borrower (a natural person - consumer) has an
obligation to reimburse the provider of debt recovery services
the expenses incurred thereby in recovering the debt if their
reimbursement is requested and there is no dispute regarding the
existence of the debt.
(2) The debt recovery expenses must be commensurate and
objectively justified. The debt recovery expenses shall be
considered to be commensurate if they correspond to the
permissible amount of debt recovery expenses specified by the
Cabinet (except for those expenses which the Cabinet has deemed
to be non-reimbursable).
(3) The Cabinet shall determine the permissible amount of debt
recovery expenses and the non-reimbursable expenses.
[13 June 2024]
Chapter
III
Communication to be Implemented During Debt Recovery and also
During Servicing of a Non-performing Credit Agreement
[13 June 2024]
Section 7. Obligation to Provide
True and Complete Information
(1) When commencing debt recovery, a creditor or provider of
debt recovery services shall notify the debtor or borrower in
writing of the existence of a debt and invite him or her to
voluntarily fulfil the delayed payment obligations. The following
information shall be provided in such notification:
1) regarding the creditor - a legal person - the firm name
(name), registration number, legal address, telephone number,
electronic mail address and other contact information; regarding
the creditor - a natural person - the given name, surname,
personal identity number, address, telephone number, electronic
mail address and other contact information;
2) regarding the provider of debt recovery services - a legal
person - the firm name (name), registration number, special
permit (licence) number, legal address, telephone number,
electronic mail address and other contact information; regarding
the provider of debt recovery services - a natural person - the
given name, surname, personal identity number, special permit
(licence) number, address, telephone number, electronic mail
address and other contact information;
3) the legal grounds on which the provider of debt recovery
service has acquired the right to recover the debt - the type of
transaction and the date of entering into the transaction;
4) the legal grounds for the creditor's claim - the type of
transaction entered into by the creditor and the debtor or
borrower, the date of entering into the transaction, and the
subject-matter of the transaction;
5) the amount of the debt, including the amount of the
principal debt, the interest on allocation of the amount of money
or other fungible property, the contracted or lawful interest and
the amount of a fine;
6) the debt recovery expenses (if any);
7) the procedures and deadline for the repayment of debt;
8) information regarding the possibility to express justified
written objections against the existence of a debt, its amount
and payment deadline, providing that at least 21 days from the
day of receipt of the notification are allotted for the
expression of objections.
(11) If the provider of debt recovery services and
the credit purchaser are the same person, then after acquiring
the creditor's right to claim provided for in a non-performing
credit agreement, the notification addressed to the borrower
shall include, in addition to the information specified in the
Section 7, Paragraph one of this Law, the information referred to
in Section 20, Paragraph one of this Law.
(2) If the creditor or provider of debt recovery services
sends a written notification by mail or the debtor or borrower
sends written objections by mail, it shall be deemed that the
information has been received on the seventh day after its
handover at the post office, even if the addressee has actually
received the consignment sooner.
(3) During the time period specified for the expression of
objections by the debtor or borrower, the creditor and the
provider of debt recovery services shall not be permitted to take
debt recovery activities (to include information on the debtor or
borrower and his or her debt in the debt history database or to
take activities which increase the expenses of debt recovery,
etc.) which may cause unfavourable consequences for the debtor or
borrower.
[13 June 2024]
Section 8. Obligation to Co-operate
and Expression of Objections Regarding a Debt
(1) A debtor or borrower has an obligation to co-operate with
a creditor, a credit purchaser, and a provider of debt recovery
services.
(2) If a debtor or borrower admits a debt in its entirety or
partially but is unable to repay it according to the procedures
or within the time period specified by the creditor or provider
of debt recovery services, the debtor or borrower is entitled, by
justifying why the fulfilment of payment obligations is not
possible, to offer his or her procedures and time period for
settling the payment obligations.
(3) A creditor or provider of debt recovery services shall
examine the proposal of a debtor or borrower referred to in
Paragraph two of this Section for settling the payment
obligations and give the debtor or borrower an answer.
(4) Upon receipt of the objections of a debtor or borrower
against the existence of a debt or the amount thereof, the
creditor or provider of debt recovery services shall justify in
writing the existence of the debt and the amount thereof and, if
requested by the debtor or borrower, issue copies of the
documents justifying the existence of the debt and the amount
thereof.
[13 June 2024]
Section 9. Communication with Third
Parties
(1) In communication with third parties, a creditor, a
provider of debt recovery services, a credit purchaser, a credit
seller, and an outsourcing service provider are not entitled to
disclose information on a debtor without the consent of the
debtor.
(2) In communication with third parties, a creditor, a
provider of debt recovery services, a credit purchaser, a credit
seller, and an outsourcing service provider are entitled to
provide only the following information on themselves during the
debt recovery process:
1) the given name and surname of the person who is
implementing the communication;
2) the name (firm name) or given name and surname of the
creditor, provider of debt recovery services, credit purchaser,
credit seller, or outsourcing service provider;
3) the contact information of the creditor, provider of debt
recovery services, credit purchaser, credit seller, or
outsourcing service provider.
[13 June 2024]
Section 10. Communication
Culture
(1) In communication with a debtor or borrower in the case of
servicing of a non-performing credit agreement, it is
prohibited:
1) to use aggressive means of communication (including
expression of threats and taking activities which prejudice
gender, age, race or ethnicity and safety, religious, political
or other beliefs, disability, social background and financial or
family status, as well as sexual orientation);
2) to communicate with the debtor or borrower in a manner
offensive to his or her dignity or honour;
3) to visit the debtor at his or her place of employment,
place of the performance of work, or place of residence without
prior consent of the debtor or borrower (a natural person -
consumer);
4) to provide false or misleading information regarding the
consequences of non-payment of the debt.
(2) In communication with a debtor or borrower, the creditor,
the provider of debt recovery services, the credit purchaser, the
credit seller, and the outsourcing service provider has an
obligation to observe commensurability.
(3) Communication shall be considered to be incommensurable if
it:
1) takes place on Sundays or on public holidays determined by
Law;
2) takes place between the hours of 21.00 and 8.00 or without
prior consent of the debtor between the hours of 21.00 until
23.00;
3) encumbers the ability of the debtor or borrower to use the
relevant electronic means of communication for daily
communication.
[13 June 2024]
Section 11. Means of
Communication
(1) Unless otherwise laid down in law, communication with a
debtor or borrower (a natural person - consumer) shall take place
using the means of communication and contact information
indicated in the lawful transaction entered into.
(2) If a debtor or borrower (a natural person - consumer)
cannot be reached using the means of communication and contact
information referred to in Paragraph one of this Section or if it
has been requested by the debtor or borrower himself or herself
(a natural person - consumer), the creditor and the provider of
debt recovery services are entitled to use the contact
information which has become known to them or used for
communication with the debtor or borrower (a natural person -
consumer) during previous cooperation.
(3) If a debtor or borrower (a natural person - consumer)
cannot be reached using the means of communication and contact
information referred to in Paragraph one or two of this Section,
communication shall be implemented in writing, sending the
necessary information to the address of the declared place of
residence of the debtor or borrower (a natural person -
consumer).
[13 June 2024]
Chapter
IV
Debt History Database and Entry of Information Therein
Section 12. Debt History
Database
(1) The debt history database is an aggregate of data
regarding a debtor or borrower (a natural person - consumer) and
his or her debt which is recovered in the name of or on behalf of
a creditor or has been recovered by a provider of debt recovery
services.
(2) The holder of the debt history database shall be the
provider of debt recovery services.
(3) The purpose of the debt history database is to provide
information to a third party so that it could assess the ability
of a natural person to fulfil the payment obligations.
(4) The provider of debt recovery services is entitled to
create a debt history database including information therein on
the debtor or borrower (a natural person - consumer) and the debt
thereof if one of the following conditions is in effect:
1) the debtor or borrower (a natural person - consumer) has
not expressed objections in writing against the existence of a
debt or the amount thereof;
2) the debtor or borrower (a natural person - consumer) has
expressed objections in writing against the existence of a debt
or the amount thereof, but the court or arbitration court has
recognised the claim of a creditor or provider of debt recovery
services for the fulfilment of obligations as justified and the
judgement has entered into legal effect;
3) the debtor or borrower has expressed substantiated
objections in writing against the existence of a debt or the
amount thereof, but the provider of debt recovery services has
sent a reasoned response to the debtor or borrower and provided
copies of documents justifying the existence and amount of the
debt, informing the debtor or borrower that information on the
debt will be included in the debt history database with an
indication that written objections have been received from the
debtor or borrower against the existence or the amount of the
debt and that there is a dispute in the case regarding the
justification of the debt.
[13 June 2024]
Section 13. Inclusion of Information
in the Debt History Database
(1) Information on a debtor or borrower (a natural person -
consumer) and his or her debt shall be included in the debt
history database if all the following conditions have been
met:
1) fulfilment of the payment obligations specified in a
transaction or legal act has been delayed by more than 60
days;
2) the period for the expression of objections by a debtor or
borrower (a natural person - consumer) specified in the
notification of the provider of debt recovery services has
expired, and the debtor or borrower (a natural person - consumer)
has not paid his or her debt within this period.
(2) The following information on a debtor or borrower (a
natural person - consumer) and his or her debt shall be included
in the debt history database:
1) the given name, surname, personal identity number of the
debtor or borrower (a natural person - consumer);
2) the date when the information was included in the debt
history database;
3) the amount of the debt, including the amount of the
principal debt, the interest on allocation of the amount of money
or other fungible property, the contracted or lawful interest and
the amount of a fine;
4) the paid part of the debt;
5) the debt repayment duration;
6) the status of debt recovery (whether or not debt recovery
is taking place; the date on which debt recovery was terminated;
whether or not there is a dispute regarding the existence of a
debt or the amount thereof);
7) if the creditor is a performer of economic activity - the
sector in which the creditor of the debtor or borrower (a natural
person - consumer) operates in accordance with Regulation (EC) No
1893/2006 of the European Parliament and of the Council of 20
December 2006 establishing the statistical classification of
economic activities NACE Revision 2 and amending Council
Regulation (EEC) No 3037/90 as well as certain EC Regulations on
specific statistical domains.
(3) The provider of debt recovery services shall notify the
debtor or borrower (a natural person - consumer) in writing of
the inclusion of information into the debt history database. The
information included therein shall be made available to third
parties no sooner than 30 days after sending of the notification
to the debtor or borrower (a natural person - consumer).
(4) A third party is entitled, on the basis of a written
contract with the holder of the debt history database, to receive
the information referred to in Paragraph two of this Section
entered in the debt history database on the debtor or borrower (a
natural person - consumer) and his or her debt if the debtor or
borrower (a natural person - consumer) has given his or her
consent thereto in accordance with the procedures laid down in
the Personal Data Processing Law. If the debtor or borrower (a
natural person - consumer) alleges that he or she has not given
consent to the transfer of information entered in the database to
the third party, the person who alleges that the consent has been
given has the obligation to prove the existence of such
consent.
(5) If the provider of debt recovery services itself or
according to information provided by a debtor or borrower (a
natural person - consumer), or another person establishes that
the information included in the database of debt history is
inaccurate, incomplete, or false, the provider of debt recovery
services has an obligation to immediately rectify these
shortcomings and notify accordingly the third parties who have
received the relevant information. The refusal of the provider of
debt recovery services to rectify the relevant shortcomings may
be contested to the Data State Inspectorate in accordance with
the procedures laid down the Personal Data Processing Law.
(6) Information in the debt history database shall be stored
for three years from the day of payment of the debt or from the
day when the obligations were extinguished in accordance with the
procedures specified by law. If a debt is not repaid, information
on the debt of the debtor or borrower (a natural person -
consumer) shall be stored in the debt history database until the
day when right to claim has expired.
[13 June 2024]
Section 14. Information on the
Debtor and the Borrower to be Received from the Register of
Natural Persons
In order to implement the requirements of Section 7 of this
Law, the provider of debt recovery services and the creditor who
has received the permit (licence) for the provision of crediting
services or which is a credit institution is entitled to acquire
the following information from the Register of Natural
Persons:
1) the declared place of residence of the debtor or borrower
(a natural person - consumer);
2) a confirmation of the death of the debtor or borrower (a
natural person - consumer).
[13 June 2024]
Chapter V
Administrative Liability in the Field of Extrajudicial Recovery
of Debt and Competence in the Administrative Offence
Proceedings
[6 June 2019 / This
Chapter shall come into force on 1 July 2020. See
Paragraph 6 of Transitional Provisions]
Section 15. Administrative Liability
in the Field of Extrajudicial Recovery of Debt
For the provision of extrajudicial debt recovery services
without the special permit (licence) which is required by this
law or continuing the provision of extrajudicial debt recovery
services after the special permit (licence) has been suspended or
cancelled, or its term of validity has expired, a fine from
fifty-six to four hundred units of fine shall be imposed on a
natural person or member of the board with or without depriving
the member of the board of the right to hold certain offices for
a period of up to five years.
[6 June 2019 / Section shall come into force on 1
July 2020. See Paragraph 6 of Transitional
Provisions]
Section 16. Competence in the
Administrative Offence Proceedings
The administrative offence proceedings for the offence
referred to in Section 15 of this Law shall be conducted by the
Consumer Rights Protection Centre.
[6 June 2019 / Section shall come into force on 1
July 2020. See Paragraph 6 of Transitional
Provisions]
Chapter
VI
Servicing and Supervision of Non-Performing Credit
Agreements
[13 June 2024]
Section 17. Servicing Activities of
a Non-Performing Credit Agreement
The following shall be considered servicing activities of a
non-performing credit agreement:
1) recovery of a payment;
2) an agreement with the borrower in relation to the terms and
conditions of the credit agreement in conformity with the
instructions of the credit purchaser;
3) examination of a complaint arising from the credit
agreement regarding obligations of the creditor provided for in
the agreement or the agreement itself.
[13 June 2024]
Section 18. Cooperation between the
Provider of Debt Recovery Services and the Credit Purchaser
(1) The provider of debt recovery services shall enter into a
written agreement with the credit purchaser, indicating the
following:
1) a detailed description of the activities to be
performed;
2) the amount of remuneration for the provider of debt
recovery services or the procedures for the calculation thereof
if the amount of the remuneration is not a fixed amount;
3) the extent to which the provider of debt recovery services
may represent the credit purchaser in relationship with the
borrower;
4) the obligation of parties to comply with the legal acts
governing consumer rights protection and data protection;
5) communication requirements with the borrower when carrying
out activities arising from the agreement;
6) the obligation to inform the credit purchaser of
outsourcing of any servicing activities carried out by the
provider of debt recovery services in respect of the
non-performing credit agreement.
(2) For five years, but not more than 10 years after
termination of the agreement referred to in Paragraph one of this
Section, the provider of debt recovery services has an obligation
to retain and, upon request, provide the following to the
Consumer Rights Protection Centre:
1) correspondence with the borrower and the credit
purchaser;
2) instructions received from the credit purchaser in respect
of the rights of the credit seller provided for in the
non-performing credit agreement or the credit agreement
itself;
3) the cooperation agreement entered into between the provider
of debt recovery services and the credit purchaser.
[13 June 2024]
Section 19. Cooperation between the
Provider of Debt Recovery Services and the Outsourcing Service
Provider
(1) The provider of debt recovery services shall be
responsible for the fulfilment of the obligations specified in
this Law even when it uses an outsourcing service provider to
perform one or more servicing activities of non-performing credit
agreements.
(2) When assigning the servicing of non-performing credit
agreements to an outsourcing service provider, the provider of
debt recovery services and the outsourcing service provider shall
enter into a written agreement that provides for the obligation
to comply with the legal provisions applicable to debt recovery
services. The terms and conditions of this agreement shall not
affect the relationship of the provider of debt recovery services
with the credit purchaser and the obligations towards the
borrower.
(3) The outsourcing service provider may only perform the
servicing activities of a non-performing credit agreement which
have been assigned thereto.
(4) The assignment of specific servicing activities of
non-performing credit agreements to the outsourcing service
provider shall not affect the obligation of the provider of debt
recovery services to comply with the requirements laid down for
obtaining the special permit (licence).
(5) The assignment of servicing activities of non-performing
credit agreements to the outsourcing service provider shall not
affect the rights of the Consumer Rights Protection Centre to
supervise the provider of debt recovery services.
(6) The outsourcing service provider shall ensure that the
provider of debt recovery services has access to information on
all assigned servicing activities of a non-performing credit
agreement.
(7) After termination of the outsourcing agreement, the
provider of debt recovery services shall be responsible for the
performance of the servicing activities of a non-performing
credit agreement assigned to the outsourcing service
provider.
(8) Prior to assigning the servicing activities of
non-performing credit agreements to the outsourcing service
provider, the provider of debt recovery services shall inform the
Consumer Rights Protection Centre and, if applicable, also the
supervisory and control institution of the host Member State.
(9) For five years, but not more than 10 years after
termination of the agreement referred to in Paragraph one of this
Section, the provider of debt recovery services has an obligation
to retain records of the instructions given to the outsourcing
service provider, and also the cooperation agreement itself, and,
upon request, provide them to the Consumer Rights Protection
Centre.
(10) The provider of debt recovery services shall, within the
scope of the outsourcing agreement, handle any funds received
from the borrower.
[13 June 2024]
Section 20. Informing of the
Assignment of a Non-Performing Credit Agreement
(1) Prior to the commencement of debt recovery activities and
whenever requested by the borrower, the credit purchaser,
provider of debt recovery services, outsourcing service provider,
or the entity specified in Section 3.1, Clauses 1 and
3 of this Law after acquiring the right to claim of a
non-performing credit agreement, a written notification is sent
to the borrower, indicating the following:
1) information on the assignment and the date thereof;
2) the name, registration number, and contact information for
communication of the credit purchaser;
3) the name, legal address, and contact information for
communication of the provider of debt recovery services or the
entity specified in Section 3.1, Clause 1 or 3 of this
Law;
4) the name, registration number, and contact information for
communication of the outsourcing service provider, if such has
been selected;
4) the requirement to comply with the laws and regulations
governing consumer rights protection;
5) the name, address, and contact information of the
supervisory authority where a complaint can be submitted.
(2) Each subsequent notification shall include the information
specified in Paragraph one, Clause 2 of this Section, but if the
notification has been sent in relation to the appointment of a
new provider of debt recovery services, it shall also include the
information specified in Paragraph one, Clause 3 of this
Section.
[13 June 2024]
Chapter
VII
Provision of the Cross-border Debt Recovery Services in Respect
of a Debt Arising from a Non-performing Credit Agreement
[13 June 2024]
Section 21. Provision of the Debt
Recovery Services in the Host Member State
The provider of debt recovery services which has obtained the
special permit (licence) in the Republic of Latvia referred to in
Section 5, Paragraph two of this Law has the right to provide
debt recovery services in respect of a debt arising from a
non-performing credit agreement without any restrictions in the
European Union.
[13 June 2024]
Section 22. Supervision of the
Provider of Debt Recovery Services Providing Cross-border
Services
(1) The Consumer Rights Protection Centre shall ensure mutual
exchange of information with the supervisory and control
institution of the host Member State on the supervisory measures
taken in respect of the provider of debt recovery services.
(2) The Consumer Rights Protection Centre is entitled to
assess the need and to turn to the supervisory and control
institution of the host Member State, requesting taking of
supervisory measures at the branch established by the provider of
debt recovery services or at an assigned outsourcing service
provider.
(3) The Consumer Rights Protection Centre is entitled to take
supervisory measures at the Latvian branch of the provider of
debt recover services of another European Union Member State or
at an assigned outsourcing service provider, informing the
supervisory and control institution of the home Member State of
the inspection results.
(4) If credit has been granted in the Republic of Latvia but
it is serviced by the provider of debt recovery services of
another European Union Member State and the Consumer Rights
Protection Centre has evidence at its disposal of violations
committed by the provider of debt recovery services, the Consumer
Rights Protection Centre shall inform the supervisory and control
institution of the relevant Member State, concurrently
transferring evidence of the established violations.
(5) The Consumer Rights Protection Centre shall, within two
months, inform the supervisory and control institution of the
host Member State which has provided evidence of the violations
committed by the provider of debt recovery services and the
imposed sanctions of the planned and initiated supervisory
measures.
[13 June 2024]
Chapter
VIII
Credit Purchaser
[13 June 2024]
Section 23. Right to Information on
the Rights of the Credit Seller Specified in a Non-performing
Credit Agreement
(1) The credit seller shall provide the credit purchaser with
information on the rights of the credit seller provided for in a
non-performing credit agreement or on the non-performing credit
agreement itself and the security, if any, so that prior to
entering into the agreement, the credit purchaser can assess the
value of the rights of the credit seller provided for in the
non-performing credit agreement or the value of the credit
agreement itself and the possibility of recovering this value,
guaranteeing protection and confidentiality of the information
received from the credit seller.
(2) The Consumer Rights Protection Centre is entitled to
request the credit seller to provide the information indicated in
Paragraph one of this Section and also any other information
necessary for the Consumer Rights Protection Centre to perform
its functions in accordance with this Law.
[13 June 2024]
Section 24. Obligations of the
Credit Purchaser
(1) The credit purchaser has an obligation to authorise the
provider of debt recovery services or the entity specified in
Section 3.1, Clause 1 or 3 of this Law to perform the
servicing activities of a non-performing credit agreement if the
non-performing credit agreement has been entered into with a
consumer.
(2) A representative of the credit purchaser has an obligation
to appoint the provider of debt recovery services or the entity
specified in Section 3.1, Clause 1 or 3 of this Law to
perform the servicing activities if the non-performing credit
agreement has been entered into with natural persons, including
consumers and legal persons.
(3) Activity of the credit purchaser shall be governed by this
Law and also by national and European Union legal acts in the
field of consumer rights protection.
(4) The provider of debt recovery services or the entity
specified in Section 3.1, Clause 1 or 3 of this Law
shall perform the obligations referred to in Paragraph three of
this Section and Sections 25 and 27 in the name of the credit
purchaser. If the provider of debt recovery services or the
entity specified in Section 3, Paragraph eight, Clause 1 or 3 of
this Law is not authorised, these obligations shall be performed
by the credit purchaser or a representative thereof.
[13 June 2024]
Section 25. Use of the Providers of
Debt Recovery Services or Other Entities
(1) The credit purchaser or a representative thereof shall,
not later than on the day of the commencement of servicing
activities of non-performing credit agreements, notify the
Consumer Rights Protection Centre of the name, registration
number, and legal address of the appointed providers of debt
recovery services or the entities specified in Section
3.1, Clause 1 or 3 of this Law.
(2) If the provider of debt recovery services or the entity
specified in Section 3.1, Clause 1 or 3 of this Law
which has been notified in accordance with the procedures laid
down in Paragraph one of this Section is changed, the credit
purchaser or a representative thereof shall notify the Consumer
Rights Protection Centre thereof on the day of the change.
(3) The Consumer Rights Protection Centre shall immediately
send the information received in accordance with the procedures
laid down in Paragraphs one and two of this Section to the
supervisory and control institution of the host Member State and
the supervisory and control institution of the European Union
Member State where the credit has been granted.
[13 June 2024]
Section 26. Representative of
Third-Country Credit Purchasers
(1) After assignment of the rights of the credit seller
provided for in a non-performing credit agreement or of the
credit agreement itself, the credit purchaser shall appoint a
representative that is registered or has its principal
undertaking in a European Union Member State.
(2) The institutions specified in Section 4, Paragraph one of
this Law are entitled to request that the representative of the
credit purchaser ensures compliance with the requirements of this
Law.
[13 June 2024]
Section 27. Assignment of the Rights
of the Credit Seller Provided for in a Non-performing Credit
Agreement or Assignment of the Credit Agreement Itself
(1) The credit purchaser or a representative selected thereby
which assigns the rights of the credit seller provided for in a
non-performing credit agreement or the credit agreement itself to
another credit purchaser shall inform the supervisory and control
institutions twice a year of the legal entity identifier (LEI) of
the new credit purchaser or the representative selected thereby
or, in the cases where there is no such identifier, of the
following:
1) the identity of the new credit purchaser or the appointed
representative thereof, or the members of the management or
administrative bodies thereof, and the persons with qualifying
holding in the new credit purchaser or the representative thereof
within the meaning of Article 4(1)(36) of Regulation (EU) No
575/2013 of the European Parliament and of the Council of 26 June
2013 on prudential requirements for credit institutions and
investment firms and amending Regulation (EU) No 648/2012;
2) the registration number and legal address of the new credit
purchaser or the representative thereof.
(2) The credit purchaser or the representative thereof shall
inform the supervisory and control institutions of the
following:
1) the number of non-performing credit agreements and the
outstanding balance;
2) the security for the non-performing credit agreement.
(3) If necessary, the Consumer Rights Protection Centre may
request the credit purchaser or an appointed representative
thereof to provide the information referred to in Paragraph one
of this Section.
(4) The Consumer Rights Protection Centre shall, not later
than within one month, send the information received in
accordance with the procedures laid down in this Section to the
supervisory and control institutions of the host Member State and
the supervisory and control institutions of the home Member State
of the new credit purchaser.
[13 June 2024]
Transitional
Provisions
1. Section 5, Paragraphs two, three, four and five, as well as
Section 6 of this Law shall come into force on 1 February
2013.
2. Section 5, Paragraph one of this Law shall come into force
on 1 May 2013.
3. The Cabinet shall issue the regulations referred to in
Section 5, Paragraphs four and five, as well as Section 6,
Paragraph three of this Law by 31 January 2013.
4. A provider of debt recovery services is entitled to obtain
the information referred to in Section 14 of this Law from the
Population Register when he or she has fulfilled the requirement
specified in Section 5, Paragraph one of this Law and received
the special permit (licence) for debt recovery.
5. A provider of debt recovery services who has commenced debt
recovery from a debtor until the day of the coming into force of
this Law is entitled to enter information on a debtor and his or
her debt in the debt history database if both of the following
conditions have been met:
1) the debtor has not expressed objections in writing against
the existence of a debt or the amount thereof;
2) the provider of debt recovery services has legally acquired
the data on the debtor and his or her debt.
6. Chapter V of this Law shall come into force concurrently
with the Law on Administrative Liability.
[6 June 2019]
Informative
Reference to European Union Directive
[13 June 2024]
The Law contains legal norms arising from Directive (EU)
2021/2167 of the European Parliament and of the Council of 24
November 2021 on credit servicers and credit purchasers and
amending Directives 2008/48/EC and 2014/17/EU.
This Law has been adopted by the Saeima on 8 November
2012.
President A. Bērziņš
Riga, 27 November 2012
1 The Parliament of the Republic of
Latvia
Translation © 2024 Valsts valodas centrs (State
Language Centre)