Loan on agreed time
The moment a debt is not repaid at the agreed time or the agreed fee for making the money (interest) available is not paid on time, the creditor will be the debtor (person in debt) subject to measures to meet his obligations. A creditor or his collection agency will in the first instance send a reminder and make the outstanding amount due. This means that the amount must be paid by return (usually within 5 working days), otherwise collection measures will follow. They call this a ‘notice of default’. Such a ‘notice of default’ is not necessary if you have agreed to a payment term when purchasing. In that case you are automatically in default if you pay late and the company can charge statutory interest from the first day after the payment term has expired (see legal interest below). The debt collection measures are often disclosed in the contract when entering into the debt or included in the sales or loan conditions.
First, a creditor or his collection agency may calculate collection costs. The law does not state how much costs they may charge. However, collection costs must always be ‘reasonable’. Also, only costs that are actually incurred may be charged. Companies can calculate a fixed amount in collection costs, or a percentage of the principal (that is the original purchase amount). As a rule, a maximum of 15% of the principal is often taken as ‘reasonable’ collection costs for claims up to $ 5000.
Secondly, the collection costs may be increased by the statutory interest. Although there is nothing in the law about the amount of collection costs, there is a standard for it. In recovery procedures, subdistrict court judges use a table with fixed amounts to determine the maximum collection costs that the creditor may charge. The legal interest is in fact a payment that you pay to the company because you pay too late. At present, the level of the statutory interest is 6%. The longer you fail to meet your payment obligations, the more serious the debt collection measures become: the creditor can call in a debt collection agency or bailiff to collect the claim. This also entails additional costs, which can be recovered from the debtor under contract and law.
A collection agency no longer has powers as a creditor.
He therefore has no more legal options for forcing debtors to pay than a creditor. A collection agency does specialize in collecting outstanding accounts, which is why a creditor often transfers this to a collection agency.
It can happen that a company starts a collection procedure, while you have never ordered or paid anything. Then it is best to send a registered letter to the collection agency and provide a copy of this letter to the supplier. In this letter, clearly explain what you think is going on. Keep copies of these letters together with the shipping receipts. If the case nevertheless occurs before a court, you can thereby try to convince the court that you are right. There is a chance that the claim will be rejected.