Today, September 1st, the Law of May 4, 2023, which inserts Book XIX “Consumer Debts” into the Belgian Code of Economic Law, comes into effect for contracts concluded with consumers from this day onwards.
Starting from December 1, 2023, this text will also apply to the recovery of consumer debts arising from contracts concluded before September 1, 2023, if the late payment or attempt at amicable recovery occurs after September 1, 2023.
The insertion of this book aims to update the rules regarding the amicable debt recovery process for consumers, whether by the creditor directly or through third parties. This law also seeks to strike a balance between the negative consequences that businesses may face due to consumer payment delays and the financial impact that debt recovery activities can have on consumers themselves.
When a consumer fails to repay their debt on the due date specified in a contract, and if that contract includes a clause providing for penalties in case of late payment, this clause can only be activated after following a specific procedure.
First Reminder
Firstly, the creditor must send a notice to the consumer, typically in the form of a first reminder. The costs of the first reminder cannot be charged to the consumer. Regarding contracts for the regular supply of goods or services, reminders related to three due dates in a given calendar year must be free for the consumer. The costs of additional reminders cannot exceed 7.50 euros, plus applicable postage fees at the time of sending.
Grace Period
Once this first reminder is sent, at least a 14-calendar-day period must pass before the penalty clause can be applied. This 14-day period begins from the third business day following the sending of the reminder to the consumer.
However, if the reminder is sent to the consumer electronically, then the 14-calendar-day period starts from the calendar day immediately following the electronic reminder sent to the consumer.
Interest or Flat Fee
If a consumer does not pay their debt within 14 calendar days after the due date, and if the contract includes a late interest clause, a small or medium-sized enterprise (SME) can decide to start calculating this late interest from the day following the sending of a reminder to the consumer. An SME is defined according to the criteria set out in the Companies and Associations Code at the time of the application of these rules.
In case of total or partial non-payment of the debt after the aforementioned 14-day period, the company can claim only two types of payments from the consumer.
One one hand, there are late interest charges, which cannot exceed the base rate plus eight percentage points, as provided for in Article 5, paragraph 2, of the Law of August 2, 2002, concerning the fight against late payment in commercial transactions. These interest charges are calculated on the remaining sum to be paid.
On the other, there is a flat fee that must be specifically provided for in the contract. This fee is intended to cover both late interest and all costs associated with amicably recovering the unpaid debt. The amount of this fee varies depending on the remaining debt, which is 20 euros if the amount due is less than or equal to 150 euros, 30 euros plus 10% of the amount due between 150.01 and 500 euros if the debt falls within this range, and finally, 65 euros plus 5% of the amount due beyond 500 euros, with a maximum of 2,000 euros for debts exceeding 500 euros.
Are your general terms and conditions in compliance?
It is recommended that businesses promptly update their general terms and conditions to comply with this new law. Any provisions to the contrary will be null and void. Please contact Dominique BOGAERT, Partner, for any questions or assistance: dbo@daldewolf.com or +32 485 95 55 45.