How Book XIX changes collection of consumer debts

The Belgian legislator published on 23/05/2023 the act inserting Book XIX “Consumer debts” of 4 May 2023. The act aims, in the first instance, to spare the consumer any cost on your first reminder, but it also imposes a specific damages scale for every B2C claim.

In this blog post we describe the impact of that insertion on the collection of consumer debts, given that the act must be applied from 1/09/2023 for new contracts and from 01/12/2023 for existing contracts.

Important and mandatory adjustments

Which mandatory adjustments to your internal processes and general terms and conditions does the insertion of Book XIX entail?

A. Application of Article XIX.2: mandatory first free reminder

• The first reminder must always be free of charge (please note: for recurring invoicing this covers three months).

• Your debtor must in total be given “3 working days” and “14 calendar days” to react. In practice this is a difficult calculation (weekends and public holidays), which is why we advise a period of 20 days.

B. Application of Article XIX.4: penalty clauses

Later damages must be clearly included in your general terms and conditions and comprise three elements (thus from the second reminder onwards):

• The statutory interest: For SMEs, calculated from the date the first reminder is sent. For non-SMEs, interest only starts after the period following the first reminder has expired. Interest is limited to a maximum of 8 points above the reference rate of the Act of August 2002 (currently 12% per year, but please note: it varies quarterly).

• The contractual/statutory penalty clause that must be strictly implemented in your general terms and conditions:
  1. For amounts between EUR 0–150: a penalty of EUR 20; For amounts between EUR 150.01–500: a penalty of EUR 30 + 10% on the slice between 150.01–500 (e.g. invoice of EUR 400 = EUR 30 + (250 × 10%) = EUR 55); For amounts above EUR 500: damages of EUR 65 + 5% on the slice above EUR 500 (e.g. invoice of EUR 5,000 = EUR 65 + (4,500 × 5%) = EUR 290); PLEASE NOTE: the penalty clause can never exceed EUR 2,000.
• For amounts between EUR 0–150: a penalty of EUR 20;
• For amounts between EUR 150.01–500: a penalty of EUR 30 + 10% on the slice between 150.01–500 (e.g. invoice of EUR 400 = EUR 30 + (250 × 10%) = EUR 55);
• For amounts above EUR 500: damages of EUR 65 + 5% on the slice above EUR 500 (e.g. invoice of EUR 5,000 = EUR 65 + (4,500 × 5%) = EUR 290);
• PLEASE NOTE: the penalty clause can never exceed EUR 2,000.

• Reminder fees and postage: EUR 7.50 per reminder + postage for reminders in case of non-payment of three due dates for recurring invoices (regular supply of goods or services during a year). Note that if your reminder was sent electronically, you of course may not charge postage. From now on it is essential to always keep proof of your reminder and to pass it on to us. P.S.: postage refers to your actual stamp/shipping cost. Finally, TCM can also assist you in this pre-litigation phase (“temporarily” or “entirely”), and we of course register all our reminders, etc.

C. Application of Article XIX.2 § 3: specific formalities when drafting your first reminder

• You will, for example, have to state very clearly what the invoice relates to — not merely a reference number, etc.;

• You will already have to mention what will be claimed if payment is not made on time (the damages items above);

• A clear reference to the date by which payment must have been made, …

D. Application of Article XIX.7: specific formalities when transferring your files to TCM

• Identification of the original creditor (identity, company number, address, telephone number, capacity and e-mail address).

• A clear description of the invoice + the date it became due

• All supporting documents relating to the debt (copies of invoices, but also copies of reminder letters and, once, your updated general terms of sale)

E. Impact on cooperation with TCM Belgium

The impact on cooperation with TCM Belgium is minimal. When transferring your files you will have to include a few necessary elements, but that will not create a heavier workload. Our systems allow you to upload everything with a simple attachment.

TCM Belgium still aims to honour existing contractual arrangements, and the cost structure will not be changed now either. Neither legislative changes, nor inflation, nor any other external factor has so far led to an adjustment of our agreements. We remain your transparent partner.

We guarantee that our systems will be adapted to the new legislation by 01/09.

Did you miss the information session of 6/07? Watch it again here!

For more information about our help in collecting unpaid invoices or about how we work, do not hesitate to contact us via s.dereze@tcm.be or 0498 29 29 14.

07/07/2023