Following warnings in several of our annual reports about the treatment of citizens by debt collection agencies, this year might see first positive steps in the regulation of this problem.

The Office of the Ombudswoman is frequently contacted by indebted citizens complaining about the manner in which they are treated by individual debt collection agencies. They claim the agencies call them by telephone at all hours and contact their family members, neighbours and even employers. This can amount to violation of their dignity and privacy.

Operation of Agencies in the Grey Zone, Regulation Lacking

Such experiences stem from the lack of regulation: although certain aspects of debt transfers are regulated by the Civil Obligations Act, it does not provide standards and rules for the agencies’ handling of the debt collection process itself.

It is the right of every individual to have their personal dignity respected by others, without harassment or diminishing their reputation in the society. This applies to the collection agencies as well: they should not make unreasonable pressure on debtors and must respect their privacy. Thus, in several of our annual reports, most recently in 2019, we recommended that the Ministry of Finance draft the regulation that would fill the existing legal gap.

The Ministry Announces Draft Law

According to the information we received from the Ministry of Finance in the process of the preparation of our 2020 annual report, the establishment of a working group is planned, tasked with drafting a law to regulate debt and loan transfers, which would be the first step in resolving the existing issues. The drafting process is set to take place during the course of this year.

The adoption of the said law would represent a positive development and a welcome change, which we have been advocating for years. With the aim of ensuring better protection of the citizens’ rights, we will continue to observe the drafting process, especially in its public consultations phase.

Agencies Only One of the Citizens’ Problems

The conduct of the debt collection agencies is just one of the problems faced by the indebted citizens – the fact we have been warning about for years. The current enforcement system functions as a vicious cycle in which the debtors are paralysed by their debt which they are not able to repay and the creditors cannot collect their claims.

The Constitution defines Croatia as a social state. As such, it must create the conditions necessary for all of its citizens to be able to live in dignity. When it comes to enforcement, this entails establishing a just, quick, efficient and inexpensive procedure, striking a procedural balance between the debtors and the collectors and ensuring the protection of the debtors’ dignity. The fulfilment of these goals would additionally contribute to the strengthening of the citizens’ trust in the institutions and, consequently, of their financial consciousness and their responsibility for their financial obligations.

More information on the issues related to enforcements is available in our 2020 Annual Report, in which we repeat our recommendation to the Ministry of Justice and Public Administration to draft, in cooperation with all relevant stakeholders, a new and comprehensive Enforcement Act.


Note: Although under our mandates we cannot institute investigation procedures based on complaints related to enforcements or the conduct of the debt collection agencies, we provide the citizens with general legal information (on legal aid, the competences of the Personal Data Protection Agency, etc.). Citizens facing these problems can enlist the services of an attorney or apply for free aid, providing they fulfil the necessary conditions.