Implementation of Legal Aid to Debtors Due to Arrears in Motor Vehicle Installments Executed by Debt Collectors as Impact of the Covid-19 Pandemic

Based on Law No. 16 of 2011 on Legal Aid, Article 1 paragraph (1) states that Legal Aid is a legal service provided by legal aid providers free of charge to Legal Aid Recipients. Legal aid is a guarantee of legal protection and a guarantee of equality before the law, which is a constitutional right for every citizen. Because, the constitution guarantees the right of every citizen to get equal treatment before the law, including the right to access justice through legal aid. Due to the Covid-19 pandemic, many people are asking for legal assistance related to the case of installment billing by debt collectors. The debt collector itself is a third party, which has an agreement with the financing institution to make efforts to force the collection of debtor vehicles because it has not paid installments as agreed. The result of this paper is that under these circumstances there is another legal remedy, namely restructuring.

Carrots or sticks in debt collection services? A voice metrics and text analysis of debt collection calls

PurposeAlthough phone calls are widely used by debt collection services to persuade delinquent customers to repay, few financial services studies have analyzed the unstructured voice and text data to investigate how debt collection call strategies drive customers to repay. Moreover, extant research opens the “black box” mainly through psychological theories without hard behavioral data of customers. The purpose of our study is to address this research gap.Design/methodology/approachThe authors randomly sampled 3,204 debt collection calls from a large consumer finance company in East Asia. To rule out alternative explanations for the findings, such as consumers' previous experience of being persuaded by debt collectors or repeated calls, the authors selected calls made to delinquent customers who had not been delinquent before and were being called by the company for the first time. The authors transformed the unstructured voice and textual data into structured data through automatic speech recognition (ASR), voice mining, natural language processing (NLP) and machine learning analyses.FindingsThe findings revealed that (1) both moral appeal (carrot) and social warning (stick) strategies decrease repayment time because they arouse mainly happy emotion and fear emotion, respectively; (2) the legal warning (stick) strategy backfires because of decreasing the happy emotion and triggering the anger emotion, which impedes customers' compliance; and (3) in contrast to traditional wisdom, the combination of carrot and stick fails to decrease the repayment time.Originality/valueThe findings provide a valuable and systematic understanding of the effect of carrot strategies, stick strategies and the combinations of them on repayment time. This study is among the first to empirically analyze the effectiveness of carrot strategies, stick strategies and their joint strategies on repayment time through unstructured vocal and textual data analysis. What's more, the previous studies open the “black box” through psychological mechanism. The authors firstly elucidate a behavioral mechanism for why consumers behave differently under varying debt collection strategies by utilizing ASR, NLP and vocal emotion analyses.

Overdue Debts and Financial Exclusion

We examine the impact of overdue debts in small villages in one of Hungary’s most disadvantaged regions. We find that a significant number of debtors with overdue debts permanently escape from debt collectors. Accordingly, in our sample, overdue debts reduce the likelihood of declared work by 14 percentage points on average. The lack of declared work alone reduces the probability of opening a bank account by 21 percentage points, and overdue debts further reduce it by 9 percentage points. The negative effect of overdue debts on health is almost as large as the positive effect of a high school diploma. In addition, the health-destroying effect extends not only to the debtor but to all members of the household. Therefore, overdue debts create a poverty trap mechanism exacerbating financial exclusion, hence resulting in significant losses for both the individual and society. We recommend paying more attention to smoothing credit cycles and resolving non-performing debt obligations.

Debt Collection Violations in Financial Technology in a Cyber-ethic and Legal Perspective

The presence of financial technology (Fintech) on the one hand makes it easy for people to obtain credit, while on the other hand, it creates various problems. In this study, two issues will be discussed, namely the application of cyber-ethic in protecting personal data and legal issues in collecting debt on Fintech. This research is a qualitative research. Data in the study were collected by means of literature study and presented descriptively and analytically. Cyber-ethic is implemented by protecting personal data. It is a transformation of traditional ethics in cyberspace. The cyber-ethic is very necessary in the business world. The application of cyber-ethic in the world of Fintech is carried out by protecting the personal data of both borrowers and third parties. Cyber-ethic violations have implications for breaking the law. Some of the billing violations on the Fintech business are sexual harassment, defamation, threats and stalking. Borrowing customers are powerless to face debt collectors’ behavior, because the debt collectors use the borrowers’ personal data to exert psychological pressure on the debtors to pay according to the bills determined unilaterally by Fintech. This condition usually occurs in illegal Fintechs that are not registered with the Financial Services Authority.

Optimization of the Law against Customer Financing That Performs Default in Leasing Agreements Legal Optimization of Customer Financing That Performs Default in Leasing Agreements in Indonesia

There are several facilities provided by financing institutions, until now leasing has become the most frequently used facility by the community. Leasing is a type of fiduciary guarantee, where in the agreement Customer Financing must pay an installment fee against the fiduciary guarantee object until the object can be said to be paid off. In practice, it is often found that Customer Financing defaults with discontinued installments and does not provide voluntary collateral objects to financing institutions. Thus, the dispute of default must be resolved immediately so that it does not take a long time, this financing institution is assisted by a third party, namely debt collectors. However, the passing of Supreme Court Decision No. 18/PUU-XVII/2019 the procedure of execution of the object of bail must now be taken by court process. In addition to the court process is considered relatively long, the value of the object of guarantee also continues to decrease over time, then in this case the financing institution becomes the aggrieved party. Therefore, research is needed so that there is no inequality of rights. This research is conducted with a juridical-normative approach and doctrinal law, with data collection techniques in document studies and leasing staff interviews, and analyzed qualitatively. To increase effectiveness in the implementation of execution rights and avoid losses that are always borne by financing institutions, it requires firm enforcement and optimization of default dispute resolution carried out by Customer Financing.

Privacy in Social Media

Nowadays social networks become very common. People use social media to keep people in touch, businesses, organizations, and many more. The information you share with your friends in the social media allows them easily to keep in touch with you. However beside friends, colleges, relatives, there are many people that are interested in the private information on social media. Identity thieves, scam artists, debt collectors, stalkers, companies use social networks to gather information. Companies that use social networks for getting information about people are intended to personalize their services for the users and to sell to advertisement. In this paper we will discuss the advantage and disadvantage of using social media and what kind of information is safe to post and how to protect it.

PROTECTION OF THE INTEREST OF THE DEBTORS IN THE PROCESS OF MAKING NOTARIUS EXECUTIVE NOTES

In the article, on the basis of the analysis of doctrinal sources and materials of the judicial practice, are considered issues of protection of debtors’ interests in notarial legal relations in relation to executing inscription execution. The analysis of law enforcement practice shows that the lion's share of executed writs of execution is recognized as not subject to execution in court, and one of the main factors is ignoring the position of the debtor in the process of making a writ of execution. The unilateral process of making a writ of execution, based on documents and information submitted only by the debt collector, without taking into account the position of the debtor, forces the debtor to further apply to the court to protect their interests. Therefore, issues of protection of the debtor's interests need to be resolved as soon as possible in order to prevent the violation of the rights of the parties. The article argues that the formalism of the process and disregard for the interests and position of the debtor in the execution of the writ of execution, becomes the basis for the universal recognition of the writ of execution as unenforceable. This significantly affects the effectiveness of extrajudicial protection of civil rights by notaries, forcing debtors to go to court to protect their interests. Based on the study, the authors proposed to ensure the balance of interests of the parties to the obligation in the process of making a writ of execution, by introducing the obligation of a notary to send a written notice to the debtor of the claimant to make a writ of execution. According to the authors, establishing the obligation of a notary to send a written notice to the debtor of the claimant's application for a writ of execution will promote a more responsible attitude of both debt collectors and notaries to this method of protection of civil rights.

Kedudukan Hukum Pidana Atas Pengambilan Kendaraan Paksa Debitur oleh Debt Collector Lembaga Pembiayaan

Abstrak Penggunaan Debt Collector pada perusahaan pembiayaan konsumen tidak dilarang asal dilaksanakan sesuai dengan prosedur yang ditetapkan dan tidak melanggar norma serta aturan yang ada. Akan tetapi pada prakteknya, para debt collector sering tidak beretika ketika menarik kendaraan milik debitur yang menunggak. Karena tugas mereka hanyalah menagih hutang bukan untuk menakuti, menyiksa apalagi berbuat yg sampai menghilangkan nyawa orang lain. Oleh karena itu, masyarakat agar mematuhi kontrak yang sudah dibuat kepada satu perusahaan pembiayaan konsumen dan pada debt collector agar tidak bertindak melanggar hukum dalam melaksanakan tugas-tugasnya. Kata Kunci : Debt Collector, Lembaga Pembiayaan, Penarikan Sepeda Motor Abstract The use of a Debt Collector in consumer finance companies is not prohibited as long as it is carried out in accordance with prescribed procedures and does not violate existing norms and regulations. However, in practice, debt collectors are often unethical when pulling vehicles belonging to delinquent debtors. Because their job is just a debt debt, not to fear, let alone taxes that have taken the lives of others. Therefore, the public must comply with the contracts that have been made with a consumer finance company and to a debt collector so as not to violate the law in carrying out their duties. Keywords : Debt Collector, Financing Institution, Motorcycle Withdrawal

Regulatory Arbitrage and Non-Judicial Debt Collection in Central and Eastern Europe - Tax Sheltering and Potential Money Laundering

Non-judicial recovery of debts is now rampant in Central and Eastern Europe (CEE). The reason is two-fold. On the one hand, the significant number of defaults in the poorer areas of Europe makes the CEE region a very attractive market for debt-collection. On the other hand, the activity is almost entirely unregulated, especially regarding abusive debt collection practices. The CEE region still lacks mature, strong, and experienced supervisory agencies that could tackle borderline activities. This enables companies involved in debt collection to comply easily with the minimal legal provisions and to circumvent the actual purpose of the law, including through tax sheltering and money laundering. The main argument developed in the paper is that the debt collection system it is designed to maximize profits, minimize tax base and, potentially, can serve as money laundering mechanism. The system functions in a triadic relationship: the debt-seller (a credit institution), the debt-buyer (usually an investment company), and the debt-administrator (a debt-collection agency, either fully owned by, or under the control of the debt-buyer), where debt portfolios are purchased at huge discounts (varying between 90 and 95% of face value). By revealing the mechanism used by debt-collectors, the paper calls for legislative intervention to seal the gap and ensure adequate taxation of debt-collection activities. The nature of regulatory arbitrage involved relates both to tax law as well as to regulatory standards, such as licensing requirements. Debt buyers benefit from the EU passport rule, make high returns on their 'investments' and optimize their taxes on profits obtained. Debt administrators perform their activity at almost no liability and no tax payable to the state. This mechanism creates favorable premises for money laundering and financing of illegal activities, as the web of offshore companies behind the debt-buyer renders the verification of the origin of their investment money extremely difficult. Using Romania as a case study, the paper addresses not only the aforementioned practices and risks, but also the potential reasons behind the state's inability either to adopt adequate legislation, or to enforce it. In doing so, the paper employs empirical evidence regarding the activity of ten Romanian debt collection agencies and relevant case law thereof. The paper concludes with the authors' proposal for a potential solution, which can be extended beyond Romania.