Debt collectors: what they can do, what they cannot, and how to protect your rights

If a bank or microfinance organisation has assigned your debt to a collection agency, the law is on your side — but only as long as you know where the debt collector's powers end. Most often the pressure is built on ignorance: calls at any time, threats of criminal liability, conversations with relatives and colleagues — all of this may be unlawful. That is why it is important to understand which actions of debt collectors are permissible and which are not.

In such a situation a person often makes mistakes: agrees to unfavourable terms, signs new documents, hands over money without a receipt, or, conversely, completely ignores the demands. The right tactics depend on who exactly is collecting, on what basis and how they behave. Below we look at the real options for action and the documents worth keeping.

Debt collectors: when a bank assigns the debt to an agency

Debt collectors are professional recovery agents who deal with debts bought from banks or microfinance organisations, or act under an agency agreement. In Kazakhstan their work is regulated by law, so it is important to understand in what capacity the agency appeared in your story.

Usually the bank sells the problem loan, and the new creditor starts calling and writing. From that moment the debtor is dealing not with the bank but with debt collectors, and their demands are not always lawful.

Then the pressure begins: calls at any hour, messages to relatives, visits to the address. Many debtors panic and start paying the wrong party, or acknowledge a debt that never existed.

The most expensive mistake is to sort things out verbally, without paperwork and without checking the documents. Before paying or signing anything, it is worth understanding whether the agency has the right to claim from you specifically, and on what basis.

• the debt was bought under an assignment agreement
• the bank hired the agency under a commission agreement
• calls and messages without written notice
• demands to repay the entire amount at once

What debt collectors may do and what they have no right to do

Lawful actions by debt collectors come down to reminders and negotiations. They may call, send messages, send letters and meet the debtor, but only at the established times and subject to the restrictions. If an agency calls at night, more often than the permitted number of times per day, or tells relatives and colleagues about the debt without the debtor's consent, that is already a violation.

It is prohibited to use physical force, threaten, humiliate honour and dignity, or damage property. Such actions are grounds for a complaint to the authorised body and the police. Keep a voice recorder at hand and record every contact: a recording of the conversation, screenshots and call logs become evidence.

• Calls and messages during the daytime
• Written notices and in-person meetings
• Negotiations on a deferral or instalment plan
• An offer to repay the debt voluntarily

If a debt collector crosses the line, record the facts and seek protection.

Pre-trial debt recovery by a collection agency

Pre-trial debt recovery by a collection agency is the stage before going to court, when the agency tries to persuade the debtor to repay the debt voluntarily. First come calls, SMS and letters with reminders, then the pressure increases: threats to describe property, to ruin your credit history, to come to your home or workplace. Under Kazakhstan law, debt collectors are obliged to make an audio recording of every conversation with the debtor and to keep it — it is useful to keep this in mind: the recording captures both your words and what the agency's employee said.

At this stage it is important for the debtor not to act impulsively. Remember a few rules:

• Do not acknowledge the debt over the phone and do not promise an amount you cannot repay.
• Record the date, time and substance of each call, keep SMS and letters.
• Do not open the door to strangers if they have not shown documents and have not named the agency.
• Check whether the agency has a contract with the bank and whether your debt has actually been transferred to it.
• If the pressure goes beyond the law, record the violations and seek advice.

Lawyer's assistance with pressure from debt collectors

When pressure from debt collectors goes beyond the law, legal assistance with pressure from debt collectors becomes not just advice, but a way to stop the violations. A lawyer will help record the facts: preserve recordings of calls, print out correspondence, collect witness statements. On their basis, a complaint is prepared to the authorised body that supervises collection activity, and to law enforcement bodies.

If debt collectors break the law, a lawyer can prepare a claim for the protection of honour, dignity and business reputation, as well as for compensation for moral harm. In such a case, evidence matters: the more precisely insults, threats or the spreading of false information are recorded, the higher the chances of the claims being satisfied. The lawyer will assess the prospects, gather the documents and represent your interests in court.

• Recordings of telephone conversations and screenshots of messages.
• Written statements from witnesses of the pressure.
• Copies of the contract with the bank and notifications from the debt collectors.
• A bank statement, if funds were debited without grounds.

Recovery of a debt under a receipt through debt collectors

A debt under a receipt may end up with a collection agency if the creditor has concluded a contract with it. Before discussing the amount, ask the agency for the basis — the contract with the creditor or an assignment agreement: without it, its demands have nothing behind them. In other words, the very fact that an agency is calling you rather than the lender does not yet mean a violation.

At the same time, recovery of a debt under a receipt through debt collectors outside court remains only persuasion: letters, calls, negotiations. To obtain enforcement, a court is needed — without a judicial act, no enforcement officer will debit money from you. In practice it is more often like this: the agency threatens with court, but the actual claim is filed by the lender itself, while the debt collectors only conduct negotiations and gather information about your property and income.

• Check whether the creditor has a contract with the agency and whether you were notified of the transfer of the debt.
• Do not acknowledge the debt out loud or in correspondence if the amount or the limitation period is disputed.
• Demand a written calculation and copies of documents, rather than listening to figures over the phone.
• Do not pay to personal cards or phone numbers: only to the details specified in the contract.

The difference between a bank and debt collectors: what a debtor should expect

A bank and a debt collection agency act differently. A bank is bound by banking secrecy, so it is not entitled to disclose information about your debt to third parties. Debt collectors also cannot report the debt to outsiders. But while a bank is interested in repayment of the loan and is often ready for restructuring, debt collectors work for a fee from what is recovered, so they apply pressure more aggressively.

Debt collectors may call only at certain times and with a limited frequency established by law. They are not entitled to call at night, threaten or disturb relatives. A bank, in turn, usually offers official options: a deferral, refinancing or a settlement agreement.

Debt collectors cannot disclose information about the debt to third parties.

What to do if debt collectors violate your rights

When faced with pressure from debt collectors, first of all record every contact: keep recordings of conversations, screenshots of messages and letters. This will become the basis for a complaint and for protecting your rights. At the same time, a lawyer will help assess the lawfulness of the demands and prepare a position.

Complain about unlawful actions by debt collectors to the authorised body, the prosecutor's office or the police. Attach the evidence collected to the complaint: audio recordings, printouts of messages, copies of letters.

If debt collectors threaten you, call at night or disclose the debt to third parties, do not negotiate on your own and do not acknowledge the debt under pressure. Set out the situation in writing and pass the documents to a lawyer to assess the prospects.

Here is an approximate course of action:

• Collect evidence: audio recordings, screenshots, letters.
• File a complaint with the authorised body, the prosecutor's office or the police.
• Engage a lawyer to protect your interests.

The main rule is not to resolve the problem over the phone: demand documents, record every contact and do not pay until you have verified the basis of the debt.