Financial Supervisory Service Provides 4-Step Response Guidelines for Illegal and Unfair Debt Collection: "Request Suspension or Postponement, Report"

The Financial Supervisory Service (FSS) informed consumers on the 22nd about a four-step response plan to illegal and unfair debt collection practices. They urged consumers to familiarize themselves with the step-by-step guidelines, such as requesting suspension of collection for old debts, asking for collection deferral if immediate repayment is difficult, and reporting illegal collection activities.

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The FSS conducted on-site inspections from September to October last year on 30 loan companies for unfair debt collection practices and strengthened internal controls within debt collection companies, but illegal debt collection activities continue to occur. They emphasized that consumers themselves need to understand and respond to the step-by-step procedures for stopping or deferring debt collection.

First, consumers were advised to verify their own debt information. For personal financial debts, they should check the debt collection commencement notice, and for civil and commercial debts handled by debt collection companies, they should review the notice of acceptance. These notices include information such as the creditor, debt amount, overdue amount and period, scheduled collection start date, collector’s name and contact information, collection methods, and ways to exercise defense rights. According to the Debt Collection Act, consumers can also request a debt confirmation document from the debt collector in addition to the notice.

They stated that consumers should request suspension of collection for old debts. By confirming the statute of limitations?10 years for civil debts, 5 years for financial debts, and 5 years for commercial debts?consumers can claim to the debt collector that the statute of limitations has expired. Additionally, collection of telecommunications fees under 300,000 KRW overdue for more than 3 years is prohibited regardless of the statute of limitations, so consumers should request suspension of collection in such cases.

If there is no repayment obligation, consumers should request suspension of collection; if there is an obligation but immediate repayment is difficult, they should request deferral. When a debtor is undergoing rehabilitation procedures, collection on debts subject to discharge or non-existent debts should be requested to stop. If a debt collector contacts the debtor more than 7 times within 7 days without justifiable reason, consumers should request suspension of collection. For personal financial debts, consumers can request restrictions on collection contact for up to 28 hours per week during specific time periods?for example, requesting no contact during working hours from 9 a.m. to 6 p.m.

For personal financial debts, if the debtor is designated as a special disaster area and eligible for special support, or if immediate repayment is difficult due to accidents, they can request deferral of collection contact for up to 3 months. Reasons recognized for collection deferral include death of the debtor, spouse, direct ascendants or descendants, or spouse’s direct ascendants or descendants; surgery or hospitalization due to accidents or illness; and marriage of the debtor or the debtor’s direct ascendants or descendants.

Illegal debt collection activities should be reported immediately. Consumers should secure evidence such as text messages, recordings, or emails containing the date and content of collection attempts and report them to the relevant debt finance company or the FSS. The FSS emphasized that written responses are more important than verbal ones. In cases of violent collection practices, assault, or threats, consumers should report to the police.

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