[Draft 4] - Unscrupulous Debt Collection Practices

[Simone]

The World Assembly (WA),

Noting the WA’s desire to protect the rights of borrowers, such as via GARs 476, 515, and 623;

Anxious that legitimate enforcement of overdue debts is not overshadowed by obnoxious behaviour by debt collectors;

The WA hereby enacts as follows:

1. Definitions.
   1. "Authority" means an entity designated by a WA state to enforce and interpret this resolution.
   2. "Creditor" means who owns the debt due from a debtor (defined below), such as a bank.
   3. "Debtor" means anyone owing debts to a creditor and who is under the jurisdiction of a WA state.
2. Debt collector.
   1. "Debt collector" means any entity (or employees of that entity) whose business is to enforces overdue debts as an agent on behalf of a creditor. Where applicable, this definition covers all employees of that entity (including entities that are sole proprietorships) that engage in enforcing overdue debts.
   2. This definition excludes anyone acting as an attorney or a law enforcement officer, as defined by local laws.
   3. This resolution covers all debt collectors enforcing debts legally recognised as valid by a WA state, regardless of whether the creditor is from a WA state.
3. Authorisation.
   1. Anyone who wants to conduct business as a debt collector must be duly authorised by an authority.
   2. The authority shall promulgate standards for competence, professionalism and skills for a debt collector.
   3. A debt collector must maintain professional indemnity insurance deemed adequate by an authority.
4. Jurisdiction.
   1. A debt collector that conducts business in a WA state must be in full compliance with all local laws.
   2. A debt collector needs to be separately authorised to work in each WA state (or to its subdivisions) according to local laws.
   3. No debt collector may accept business from a creditor, nor may a creditor hire a debt collector, if the expected recovery from enforcing the debt is less than the cost of enforcement.
5. Behaviour. Debt collectors may not use the following means to enforce overdue outstanding debts, subject to standards set by an authority and due process of law:
   1. take vastly disproportionate action against a debtor relative to the debts outstanding;
   2. harass or threaten the debtor, or family members, or work colleagues of a debtor, with demands for payment through such means which are likely to subject the said individuals to deep anxiety, distress or humiliation;
   3. contact the employer of the debtor unless the employer is able to act as a garnishee according to local laws;
   4. harass or threatening the guardian of a debtor that is deemed legally incompetent due to illness or misfortune;
   5. misrepresent themselves to be authorised in some government or WA capacity to claim or enforce payment;
   6. attempt to enforce debts that are known to the collector to be no longer legally valid.
6. Associates.
   1. A debt collector may not contact anyone that agreed to act merely as a referee (as to the character of a debtor) for the purpose of debt collection.
   2. A debt collector may not contact anyone that has no direct association through family or employment relations with the debtor, such as neighbours and acquaintances of the debtor, for the purpose of debt collection.
7. Guarantors.
   1. A debt collector may only attempt to recover debts from a guarantor of a debt only if it has exhausted all available means of collecting the debt from the debtor, unless the guarantor consented to acting as a primary obligor and not merely as a surety.
   2. The protections afforded to a debtor under clauses (5) also applies to a guarantor or the family members or work colleagues of a guarantor.
8. Other provisions.
   1. The conditions in clauses (5) and (7) also apply to creditors, such as banks, who enforce overdue debts themselves.
   2. Any penalties for breaches of clauses (4) to (7) shall be governed by local laws.
   3. Each WA state shall maintain a database of authorised debt collectors for verification. The said database shall be publicly available through convenient means.
   4. This resolution does not govern anything owed directly to the WA, WA organs, or a WA state, or any other debts governed by extant WA resolutions.