Banks Faced Penalties for Excessive Debt Recovery Strategies
In a series of recent developments, two financial institutions in Kamchatka Krai, Russia, have been fined for exerting pressure on citizen-debtors. The incidents, reported by the Federal Bailiff Service of Russia for Kamchatka Krai, involve a 33-year-old woman from Viluchinsk and another woman from Petropavlovsk-Kamchatsky, whose late mothers had outstanding debts with the banks.
The Moscow-based LLC "Drive Click Bank" and Bank ATB, a prominent banking institution, were found guilty of violating federal law following an administrative investigation. The violations were confirmed by lawyers from the service, who noted that the companies had exceeded the legal limits on the number of calls made to the debtors.
In the first case, Bank ATB made 164 calls to the woman from Viluchinsk using automated dialing systems over a four-week period. Despite her notification of her mother's death and the ongoing six-month inheritance period, the bank persisted in their attempts to collect the debts, breaching legislative norms that allow no more than one call per day, two per week, and eight per month.
The second case involved a woman from Petropavlovsk-Kamchatsky, who was subjected to similar pressure by an unspecified financial institution. The excessive overstepping of set limits is considered impermissible psychological pressure on a debtor.
Both banks attempted to appeal the decisions in two courts, but the appeal court in Vladivostok upheld the decisions of the Federal Bailiff Service. The fines, amounting to 50,000 rubles for Bank ATB and 60,000 rubles for the unnamed institution, were eventually paid by the companies.
The Federal Bailiff Service noted that in both cases, the amount of overdue debt owed by the borrowers was less than the fines paid by the offending banks, highlighting the severity of the violations.
These incidents come amidst a growing debt crisis in the Russian banking sector, with banks reportedly scaling back lending and seeking repayments under challenging economic conditions. The pressure seems to be in the form of tightened credit conditions and demands for repayment as the banking sector maneuvers to avoid severe capital shortfalls amid systemic risks.
While the publicly available details do not indicate widespread illegal harassment or coercion by banks, debt collection practices are regulated under Russian law, with legal limits on harassment, threats, or illegal coercion. Borrowers have recourse to challenge abusive behavior through courts or consumer protection agencies. At the systemic level, the Central Bank of Russia oversees the banking sector and can intervene if institutions violate regulatory requirements or engage in illegal practices.
This paints a picture of a banking sector under stress, applying increasing repayment pressure within a legal framework that likely includes protections against abusive practices, though the exact enforcement dynamics are not detailed in the search results. As the situation evolves, it is crucial for both banks and debtors to understand and respect their rights and obligations under the law.
The Moscow-based LLC "Drive Click Bank" and Bank ATB, a significant business entity in the finance sector, have been fined for contravening federal law in relation to debt collection practices. Both banks were found to have exceeded the legal limits on the number of calls made to debtors, placing psychological pressure on them.
