The Financial Supervisory Service has launched an inspection of NICE Credit Information after signs emerged that the firm exceeded the legal cap on debt collection contacts. The regulator is examining whether repeated collection emails to some debtors breached the limit of seven contacts over seven days set under the Personal Debtor Protection Act.
The FSS is conducting an on-site inspection of NICE Credit Information, financial industry sources said on the 13th. The inspection follows indications that the firm contacted some debtors more often than the law allows.
"In the course of collecting debts entrusted by other financial companies, emails were repeatedly sent to some debtors," an FSS official said. "The Personal Debtor Protection Act sets a ceiling on the total number of collection contacts, and we are looking into whether that was violated." The excessive collection is understood to have involved emails sent in error because of computer system problems.
The Personal Debtor Protection Act is designed to protect debtors by restricting excessive interest charges, aggressive collection practices and the sale of loans at deep discounts when payments fall behind. Debt collectors may not make more than seven collection contacts — by phone, text message or visit — over seven days for each individual debt. They are also barred from contacting debtors by any means between 9 p.m. and 8 a.m. the following day.
The FSS plans to review compliance not only with the Personal Debtor Protection Act but also with related rules including the Fair Debt Collection Practices Act and the Credit Information Use and Protection Act, according to sources.
In 2022, NICE Credit Information was fined 125.6 million won by the FSS for rule violations including repeatedly mailing notices to people who were off-limits for debt collection. The firm was also found to have failed to notify debtors before starting collection and to have contacted third parties in breach of the rules, resulting in the fine and disciplinary action against three employees, including pay cuts.
