Learn how collection agencies should act

In an ideal world, everyone pays their debts, acquires financial products they can afford, and that are within everyone's purchasing power; therefore, there would be no problems with late payments or over-indebtedness.

However, overdue loans are a reality, as are non-payments on revolving credit cards at department stores or service contracts such as telephone and cable television.

To try to recover overdue loans, financial institutions, department stores, and service companies hire what are known as collection agencies to pressure debtors into paying their financial obligations.

Some users have reported cases of harassment, unacceptable behavior, and some privacy violations by debt collection agencies. As customers of banks and consumer finance companies, it is important to understand the acceptable and unconscionable behaviors of these entities, as well as which government agency to contact if you have a complaint.

What documents should a law firm present to you?

When a collection agency contacts you, they are required to provide you with a series of data and documents that prove the legality of the debt, as well as the creditor and a breakdown of the debt.

According to the Federal Consumer Protection Agency (Profeco), these entities must provide proof of the existence of the debt and provide all the details of the commercial entity that contracted their services to collect the debt.

When reporting the amount of debt, they must provide a breakdown of the principal, interest of all types, fees, and any additional costs that are contributing to the debt's growth.

Collection agencies have the authority to pursue out-of-court debt collection or negotiate a debt restructuring. If this is the case, Profeco warns that they must provide you with the documents supporting this negotiation and, upon completion of payment, they must also submit the settlement or non-payment letter from the commercial entity they work for.

Likewise, for entities that are part of the financial system, that is, those regulated by the National Banking and Securities Commission (CNBV), collection agencies must be registered in the Registry of Collection Agencies (Redeco), where users can search for the financial institution they work for.

What collection agencies cannot do

The methods used to collect a debt are clearly stipulated by Profeco. One of the most common complaints is phone calls and visits to the debtor's home; however, both tactics are permitted with some limitations.

The hours during which they may proceed are between 7 a.m. and 10 p.m. They must address the debtor in a respectful manner and only use the contact information provided by the debtor to the commercial or financial institution; that is, they may not call third parties who are not joint debtors.

Another prohibited point is the use of signs or posters that refer to the debt, the use of mass media to publicize the debt, or the sending of correspondence with external inscriptions that refer to it.

Profeco also stipulates that they cannot impersonate legal representatives or use documents that appear to be legal representatives. Furthermore, they do not have the authority to collect payment on the debt; it must be paid directly to the commercial or financial institution.

Who should I contact in case of a complaint?

In Mexico, the entities that hire law firms are responsible for supervising their behavior with the debtor, so there are two agencies you can contact.

If the debt is with a commercial entity, such as a department store or a telecommunications company, you should file a complaint with Profeco. If the debt is with a financial institution, such as a bank or a Sofipo (Social Security Institution), you should contact the National Commission for the Protection and Defense of Users of Financial Services (Condusef).