On 23 May 2023, the act on introducing Book XIX “Consumer debts” into the Belgian Code of Economic Law (the “BCEL”) was published in the Belgian Official Gazette. As a result of this publication, the discretion of companies with regard to the recovery of consumer debts will be significantly limited from 1 September 2023.
Company’s discretion limited
With the introduction of Book XIX in the BCEL, the legislator provided some safeguards for consumers: (i) the “first reminder” obligation, (ii) the legal waiting period, (iii) the company’s information obligation and (iv) the statutory limitation regarding the scope of compensation and negligence interests.
(i) The “first reminder”
Before a company can collect its claim against a consumer and invoke a compensation clause and/or negligence interests provided for in its general terms and conditions or in an agreement with the consumer, it will first has to send a notice of default to the defaulter.
The “first reminder” will be a notice of default that should contain at least the following information: (i) the balance due and the amount in accordance with compensation clause that will be claimed in case of non-payment, (ii) the name and company number of the company-creditor, (iii) the description of the product or service that caused the debt to arise, (iv) the due date of the debt, and (v) the deadline (of at least 14 calendar days) within which the debt must be paid in order not to incur additional costs.
The required information to be included in the notice of default is of mandatory law of which cannot be deviated in any way.
(ii) The statutory waiting period
However, the mere sending of the “first reminder” is insufficient to claim the arrears and the compensation and/or negligence interests included in the general terms and conditions/agreement. Before a company can proceed to the collection of the compensation and/or negligence interests, it has to respect a waiting period of at least 14 calendar days.
This statutory waiting period starts to accrue only on the third working day after the “first reminder” being sent. However, the legislator provides for an exception in case of electronic mail, whereby the period starts to run on the first calendar day after the “first reminder” being sent by e-mail.
(iii) The information obligation of the company
The company is further obliged to provide the consumer with (i) all documentary evidence of the debt it has alleged and (ii) all necessary information regarding the procedure to be followed by the consumer to contest the debt.
(iv) The statutory limitation on the scope of damages and negligence interest
Notwithstanding the foregoing substantial obligations, the most profound change resulting from the implementation of Book XIX BCEL is the limitation of the scope of compensation clauses and negligence interests.
The maximum negligence interest on which companies can rely will be limited to the reference interest rate provided for in the Act of 2002 on combating late payment in commercial transaction plus 8 percentage points.
The scope of compensation clauses on which companies can rely will further become subject to the scope of the outstanding debt.
|outstanding amount||amount of the compensation clause|
|≤ 150 EUR||20 EUR|
|150,01 EUR – 500 EUR||30 EUR + 10% of the amount due on the tranche between 150,01 EUR – 500 EUR|
|≥ 500 EUR||65 EUR + 5% of the amount due on the tranche above 500 EUR (with a maximum of 2.000 EUR)|
What is remarkable in this new legal regime is that the company that has entered into a contract with a consumer exceeding a value of EUR 38,700 can only obtain a lump-sum compensation of maximum EUR 2,000 by invoking a compensation clause. Consequently, for example, a contractor who has concluded a contract with a consumer with an amount of EUR 200,000 will only be able to obtain EUR 2,000 by invoking the compensation clause.
In addition, companies can only claim from the consumer the sums provided for by law. Clauses (i) providing for the eligibility of additional sums and/or costs or (ii) containing amounts that deviate from the amounts provided for by law are prohibited and will held to be unwritten.
What now? Amend your general terms and conditions/agreements and provide for a concrete administrative recovery procedure
Pursuant to the incorporation of Book XIX BCEL, all general terms and conditions/agreements that provide for (compensation) clauses deviating from the amounts provided for by law will be held as not written from 1 December 2023 (irrespective of when these agreements would have been concluded). Amending such agreements or at least preparing them is appropriate.
Do you have any questions on Book XIX BCEL or are you curious about how the incorporation will affect your business? If so, do not hesitate to contact one of our experts.