Book XIX of the Code of Economic Law

At Liedekerke, we strive to provide you with the latest insights on regulatory developments. As part of our commitment to keeping you informed, we are excited to share this newsletter with you on the recent entry into force of book XIX of the Code of Economic Law (book XIX) which introduces the new regime applicable to the collection of consumer debts by enterprises and by professional debt collectors, such as bailiffs and debt collection agencies. We strongly encourage you to continue reading this newsletter for valuable insights and information, as you may have to amend your general terms and conditions applicable to the sale of goods and/or services offered to consumers and to hold up to the light your current consumer debt collection practice.

Main novelties

The main novelties of book XIX are (i) the obligation to send a first payment reminder free of charge to the consumer, (ii) the obligation to comply with a waiting period of 14 calendar days after sending the first payment reminder before the debt can be collected and the contractual damages and default interest can be applied and (iii) a statutory cap on contractual damages and default interest rates. Further, if you mandate a professional debt collector to collect the debts of your consumer-customer, your customer has to be informed of the applicable procedure to contest the debt and the possibility to request payment facilities, such as a repayment plan. If your customer requests a payment facility or contests the debt, the debt collector has to hold off any debt collection actions until you make a decision regarding this request or until a certain term has passed.

Relationship with specific law (lex specialis)

When both book XIX and a law governing a specific subject matter (lex specialis), such as the laws applicable to consumer credit, insurances, telecom, energy and water supply, etc., contain provisions on consumer debt collection, which law is applicable? Do both provisions apply or does only the specific law apply? As a rule, specific provisions prevail over the general provisions of book XIX if a cumulative application of both provisions is not possible.

Interaction with book VI of the Code of Economic Law

Debt collection is a post-sales commercial practice. As such, the provisions of book VI of the Code of Economic Law are fully applicable, and in particular the provisions regarding the prohibition of unfair commercial practices, which extends to both creditors and debt collectors. The Belgian legislator is well aware of the interaction between book XIX and book VI and has, in the preparatory works for book XIX, put forward examples of commercial practices that shall be considered unfair under book VI and which serve as a reminder of practices to avoid. The preparatory works contain, among others the following examples:

• the collection of amounts that were unforeseeable or not legally authorised;

• communications that contain inaccurate legal threats or provide incorrect information about the consequences of non-payment; and

• any indication on an envelope that suggests its contents relate to debt recovery.

Entry into force

Book XIX entered into force on 1 September 2023 and is applicable to the collection of each due and unpaid debt arising from an agreement dated on or after 1 September 2023. It will enter into force on 1 December 2023 for any delayed payment and/or debt collection arising from an agreement concluded before 1 September 2023 where the delayed payment and/or debt collection takes place after 1 September 2023.

Sanctions

Any enterprise and debt collector that does not comply with the rules of book XIX may be subject to substantive sanctions. Violation of certain provisions of book XIX results in the non-applicability of damages and default interest and the courts can impose various measures, including fines. In addition, commercial practices that do not comply with book XIX may qualify as unfair practices under book VI, which could lead to administrative and criminal sanctions.

Have you not yet reconsidered your consumer debt collection practice? Have you not yet updated your general terms and conditions applicable to the sale of goods and/or services offered to consumers to bring them in line with book XIX and in particular, do your general terms and conditions contain the following provision “in case of non-payment of an invoice on its due date, a default interest shall be applicable automatically and without prior notice of default”? Or do you wish to be fully informed of your obligations and responsibilities when collecting a consumer debt? We would be happy to assist you. Please feel free to contact us if you have any questions or concerns regarding book XIX or if you wish to have your general terms and conditions reviewed to ensure compliance with book XIX, we have the necessary in-depth expertise to assist you.

If you have any questions or concerns regarding book XIX, please reach out to one of our contacts below.