As of July 1st 2012 the new law “Standardization Act of out of court debt collection costs” came into effect. This law governs when collection costs can be charged to consumers and in what amount.
Collection costs are the costs that may be charged if a client fails to pay an invoice or payment is too late. Companies often include a provision in their general terms and conditions regarding the chargeable amount of the collection costs. Until recently it was unclear how much collection costs a company was allowed to charge defaulters; in court proceedings in the past these cost were sometimes allocated and at other time not. These new regulations should put an end to this.
When your client is a consumer, you are bound by these new rules. Below is a brief summary:
The new law requires that consumers who pay too late should first be given one last chance to pay the money owed without applying the collection costs. Collection costs may only be charged after notice to the debtor to pay the amount due within 14 days has been in vain. The reminder should thereby state the consequences of failure to pay, including the amount of collection costs to be charged. If there are multiple claims on the same customer, one reminder for these needs to be sent. For the calculation of the collection costs the claims should then be added together.
The remuneration of the collection costs is also capped at a certain percentage of the amount owed. This reimbursement follows from the table hereunder:
- By a principal sum (excluding interest owed) of up to € 2,500.00 a fee of 15% applies, with a minimum of € 40.00;
- Over the next € 2,500.00 a fee of 10% applies;
- Over the next € 5,000.00 a fee of 5% applies;
- Over the next € 190.000,00 a fee of 1% applies;
- On any additional amount applies a fee of 0.5% with a maximum of € 6,775.00;
At all times, a minimum of € 40.00 (incl. VAT) of extrajudicial costs applies which you may levy on your debtor, while the total of the costs may not exceed the maximum amount of € 6,775.00.
Businesses are not mutually obliged to adhere to these rules. They may agree to depart from the legal standards of the collection costs. This can for example be documented in the general terms and conditions. If there are no agreements made on the collection costs, then the legislation on debt collection costs shall apply.
This law is expected to give consumers an incentive to pay faster and better. From now on it is clear: a consumer who pays too late, owes collection costs.
Therefore don’t miss out collection costs, make sure that your reminders and general terms and conditions are adjusted to the new rules.
