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With its Postulate 12.3641 Council of States member Raphaël Comte called for framework conditions for the practices of debt collection companies. In its report in response to the postulate, the Federal Council came to the conclusion that it was up to the courts to decide on the amount of costs charged to debtors.
Almost ten years later, the problems raised at that time still exist and in growing numbers. The Fédération romande des consommateurs (French-speaking consumer protection association) has noted a massive increase in complaints (one per day on average in 2020) in connection with debt collection companies. These almost systematically demand exorbitant fees; they base this on Article 106 of the Swiss Code of Obligations, but do not substantiate the alleged and invoiced damage.
The additional processing fees charged increase the bill even more and bear no relation to the processing work performed. The complaints office set up by the Association of Swiss Collection Agencies (VSI) wisely avoids questioning the central issue of collection fees: Instead, it publishes a list of flat-rate fees depending on the amount claimed.
In addition to overcharging, debt collectors are using increasingly questionable and aggressive practicesThey constantly send reminders, even when the debt is not due or does not reach the actual debtor; they increase the amounts demanded very quickly until the people concerned capitulate; they threaten to enter them in credit rating databases, and so on. Under this pressure and in order to avoid trouble, the persons approached in this way pay even if they deny owing these amounts. Court intervention remains a theory, because many people have neither the personal nor the financial means to take legal action. Measures to stop these practices are therefore important.
1. when does the federal council envisage Amendment which sets a framework for the activities of the collection agencies as a whole and clearly defines their position?
2. several neighboring states have a Approval procedure set up or under Penalty prohibits the charging of collection fees. What measures does the Federal Council envisage to put an effective stop to abusive practices, in particular with regard to fees, interest or pressure on the suspected debtors?
3 Are foreign lawyers authorized to charge alleged fines for violations of road traffic law via collection agencies in Switzerland? Can such practices be prosecuted under criminal law?
Statement of the Federal Council of 11.8.21
1./2. In its report “Framework conditions of the practices of debt collection companies” of March 22, 2017, the Federal Council, in fulfillment of the Postulate Comte 12.3641 has dealt in detail with the methods of debt collection agencies. In doing so, he has developed a comprehensive Regulation of the debt collection industry (e.g. with licensing procedures and binding due diligence requirements) judged to be disproportionate and thus not justified in view of the means already in place. The Code of Obligations, criminal law and the law on fairness as well as data protection law already provide for possibilities to take action against inappropriate or aggressive practices of debt collection companies. For example, the report explained that a creditor’s own expenses or those of a debt collection agency can only be considered damage caused by default under Article 106 paragraph 1 of the Swiss Code of Obligations (SR 220) and passed on to the debtor in exceptional cases (report of March 22, 2017, section 4.1). The service of a payment order for a large amount or the threat of legal action as a means of exerting pressure to pay non-existent or unenforceable claims may constitute coercion (Art. 181 StGB, SR 311.0; see, for example, judgments of the Federal Supreme Court 6B_8/2017 E. 2 and 6B_1074/2016 E. 2.3). A debt collection agency that makes deceptive or misleading statements about its own legal options is behaving unfairly (Art. 3 para. 1 let. b UWG, SR 241). Finally, the Data Protection Act (DSG, SR 235.1) contains legal requirements for data processing that also apply to debt collection companies. With the total revision of the DPA, which was passed by Parliament on September 25, 2020 (BBl 2020 7639), data protection will be further strengthened. In summary, in the view of the Federal Council, even though problematic cases obviously occur in practice, there is no need for action at the level of legislation (see also comments on the Mo. flat 17.3561 and 20.3689).
3 Foreign traffic fines are in most cases not enforceable in Switzerland due to the lack of a treaty basis. Exceptions are, for example, the police treaty with France and the trilateral treaty with Austria and Liechtenstein, which cover assistance in the enforcement of final fines (Art. 47 et seq. of the agreement between Switzerland and France on cross-border cooperation in judicial, police and customs matters of 9 October 2007, SR 0.360.349.1; Art. 42 et seq. of the treaty between Switzerland, Austria and Liechtenstein on cross-border police cooperation of 4 June 2012, SR 0.360.163.1). The Lugano Convention (Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, SR 0.275.12), on the other hand, is not applicable to the collection of claims of a punitive nature, such as traffic fines, and at most covers the collection of unpaid foreign fees for the use of parking spaces or freeways.
If traffic fines are not legally enforceable in Switzerland, it is questionable to what extent they may be collected in Switzerland. If the alleged debtor is given the impression that the asserted claim is legally enforceable or is threatened with debt collection, this may constitute criminal coercion (see above answer to questions 1./2.).
It is often argued that the collection of foreign traffic fines in Switzerland encroaches on Swiss sovereignty and thus constitutes a criminal offense under Article 271(1) of the Swiss Penal Code (“Prohibited acts on behalf of a foreign state”) unless official authorization is granted. The extent to which such a permit could be granted is questionable. In any case, actions that fulfill the aforementioned criminal offense of coercion could not be authorized.