The Austrian Financial Market Authority (FMA) has authorised the first credit servicers under the new Credit Servicers and Credit Purchasers Act (KKG; Kreditdienstleister- und Kreditkäufergesetz). The law is intended to facilitate the selling off and management of problem loans as well as to establish a transparent secondary market for such loans. At the same time, borrowers affected by the sale should also enjoy greater protection.
The KKG entered into force this year, and transposes an EU Directive. It specifically contains regulations of the selling or collection of non-performing loans (i.e. loans that are past due or in default) granted by banks and sold on to credit purchasers. Banks are required to report the selling of non-performing loans to the FMA; credit servicers, who recover such loans on behalf of credit purchasers, are required to be authorised by the FMA. Credit servicers are undertakings that already hold a commercial authorisation as a debt collection agency (Inkassobüro).
For consumers it is particularly relevant that the selling of a non-performing loan shall not be allowed to cause any disadvantage for the borrowers. In particular, all contractual provisions, such as applicable interest rates and tenor of loans, must remain unchanged. Borrowers must be informed in a timely manner and transparently, that their loan has been sold as well as about who will take over its management. The borrowers’ legal position therefore remains unchanged, although in the future communication is with the credit servicer rather than the credit institution. Furthermore, credit servicers are subject to strict conduct rules that order that consumers must be treated fairly – especially regarding compliance with data protection and communications standards. Aggressive debt collection methods are prohibited.
Supervision of the authorised credit servicers is conducted by the FMA’s Banking Supervision Department. Further information can be found on the FMA website. Consumers can also contact the FMA via its website.
Journalists may address further enquiries to:
Boris Gröndahl (Media Spokesperson)
Tel: +43 (1) 249 59-6010
Mobile: +43 676 8824 9995
E-Mail: [email protected]