Czech collections agents threatening to confiscate laptops from families whose children need them for distance learning during COVID-19

Since the beginning of the pandemic in the Czech Republic more than 2 500 families and individuals have called a help line run by the People in Need organization that focuses on providing aid to people in association with their problems with income and indebtedness. Recently, more and more people have begun calling the help line because they are facing disproportionate pressure from collections agents. 

Apparently, some collections agents have decided to "take advantage" of the few weeks that remain before the planned adoption of a moratorium on confiscating movable property as part of collections proceedings in order in increase pressure on debtors to an enormous extent. The growth in such cases compared to the normal state of affairs is genuinely significant, typically involving request for aid in situations where the collections agent is demanding absurdly, disproportionately high payments from a debtor that they can only avoid by giving up items of property registered as collateral. 

"In moments of tension such as the economic crisis that is now arriving, we see how unsustainable the current setup of the system in the Czech Republic is. Collections agents, as private entrepreneurs, maximize their profits even at the cost of forcing debtors to borrow more money by threatening to confiscate computers and modems from families with children who need them for distance learning. This demonstrates that the system of collections for profit cannot be corrected other than by abolishing it and returning to a system of collections being enforced by state control, as it is done in eight of the 10 most developed states in Europe," said Jan Černý, the director of the Program for Social Integation at People in Need.   

As part of the aid it offers, the organization has decided to extend its help line operating hours as of Monday, 9 November until 22:00, Monday through Friday. Between 17:00 and 22:00, debt advisors are now focusing on providing crisis interventions to people visited at home by a collections agent who do not know what to do, for whatever reason.

People in Need also sent an open letter on 10 November to the Chamber of Collections Agents calling on them to exercise oversight of their members who may be about to cross the line or who have decidedly already crossed the line of proportionality and reasonableness. "Our experience from practice is clear, in the sense that some collections agents choose to take approaches that drown families in greater poverty. In the Parliament of the Czech Republic there is, right now, a bill to again introduce a moratorium on confiscating movable assets. Its adoption has been generally anticipated, which would make it impossible for such collections to be performed for a few months. The Chamber of Collections Agents disagrees with the bill, which it naturally has the right to do. Nevertheless, the Chamber should make sure collections agents are performing their tasks fairly. We have called on them to do so in an open letter," said Daniel Hůle, the head of People in Need's debt counseling center, adding:  "We will also be glad if the public sends us copies of SMS messages or e-mails they have received in association with the collection of movable assets, or recordings of telephone conversations they have held with collections agents, to the e-mail address jakprezitdluhy@clovekvtisni.cz."

OPEN LETTER TO THE CHAMBER OF COLLECTIONS AGENTS

11. 11. 2020

Call to halt disproportionate pressure during collections of movable assets by some collections agents

Dear Mr President of the Chamber, Dear Members of the Board, 

As you are certainly aware, there is currently a bill in the Parliament of the Czech Republic that would reintroduce a moratorium on the collection of movable assets. Its adoption is generally anticipated, which would make it impossible to perform such collections for several months. We know that, unlike the situation in the spring, the Chamber currently disagrees with this bill. Despite this, we believe under the current circumstances that one of the main interests of the Chamber (as the professional organization overseeing the work of collections agents in the Czech Republic) should be the upholding of the applicable rules that are meant to guarantee that collections agents perform their tasks fairly. 

The organization People in Need is involved in aiding and supporting people who cannot manage their debts. As part of our debt counseling, collections in particular are one of the most important subjects that our advisors address with people. Currently we provide debt counseling through a debt help line, which has been called by more than 2 500 people with requests for advice and aid since the beginning of the pandemic. In recent days, more and more people have begun contacting us who are facing disproportionate pressure from collections agents who have apparently decided to "take advantage" of the few weeks there are remaining until the adoption of the above-mentioned moratorium in order to increase pressure on debtors enormously. The growth in these kinds of cases compared to the normal state of affairs is genuinely significant, typically involving requests to us for aid in situations where collections agents are demanding absurdly, disproportionately high payments from these debtors that can only be avoided by giving up items of property registered as collateral.    

Despite the fact that we have different opinions on many matters concerning collections, we believe we share the same end goal with you. Fairly-performed collections are that goal. We are asking that you issue a public call to staffers of all collections agents in the Czech Republic to refrain from exerting any disproportionate pressure on debtors in the coming days and weeks through which collections agents might hope to make up for the loss of income due the future ban of several months' duration on the performance of confiscations of movable property. We believe you are also aware of the dramatic situations of many people whom the current situation has thrust into existential problems. Enormous pressure from collections agents just makes their situations worse and forces them to take out disadvantageous loans and to accept other absurd measures, which in the end result leads to their being even less able to cope with their debts. We hope that is unacceptable not just to us, but also to the Chamber.
  
We would also like to inform you that as part of the aid we offer we have decided, as of Monday, 9 November, to extend the operating hours of our helplines Monday through Friday to 22:00. From 17:00 to 22:00 our advisors focus on providing crisis interventions to people who have been visited at home by collections agents and who do not know what to do, for whatever reason. 

Sincerely,

Daniel Hůle
Head of Debt Counseling
People in Need