In 2015, the National Legislative Assembly passed the Debt Collection Act, which came into force on September 2nd, 2015. The Act aims to protect individual debtors from unethical and unsafe debt collection practices through the establishment of fair and standardized collection rules.
The Act does not only apply to individual creditors, but also institutional lenders such as banks.
“Debt collectors” means not only lenders, but any creditors of payment claims, irrespective of whether such debt is legal. The definition furthermore includes licensed attorneys authorised by natural or juristic person authorized by the creditor of a payment obligation, either legally or illegally. Additionally, anand licensed debt collection business operators.
An amendment to the Debt Collection Act which came into force on May 21st, 2019 states that debt collectors may only attempt to collect the debt no more than once a day, and only between the hours of 8am and 8pm on weekdays, and 8am and 6pm on weekends and holidays. Violation of this amendment may result in a maximum administrative penalty of 100,000 THB.
Prior to the enactment of the Debt Collection Act in 2015, it was commonplace for debt collectors in Thailand to use unseemly and amoral methods to encourage quicker repayments, without fear of legal consequences. These practices include physical violence, foul language, use of falsely claimed court orders, public defamation, or even the involvement of third parties without the debtor’s knowledge or consent.
The Debt Collection Act affects debt collectors who use unjust methods for quicker repayment of debt. Violation of the Act is considered a criminal offense which can result in a fine of up to 500,000 THB or five years of imprisonment or both.
“Prior to 2015, there existed no specific laws to protect debtors from unethical debt collectors. It is encouraging to see how Thailand is continuously improving its legal framework to provide for an orderly process of debt collection while at the same time considering the legitimate interests of creditors” said Fabian Doppler, Managing Partner of Frank Legal & Tax.
Frank Legal & Tax also pointed out some crucial aspects of the law, such as the fact that it only protects individual debtors, and not corporate debtors. The law firm also stated that with the exception of licensed third-party debt collectors, debt collection agencies, lawyers certified by the Lawyers Council of Thailand, and the debtor’s spouse, children, or parents, creditors may not reveal the debtor’s debt to any third-party without the debtor’s consent. However, debt collectors may use third parties to find the location of debtors.
About Frank Legal & Tax
FRANK Legal & Tax is a Thailand-based international law firm. Committed to helping businesses as well as property purchasers with their investments in Thailand, the firm is providing a broad range of specialist legal services. Established by international lawyers with extensive experience of the Thai legal system, FRANK Legal & Tax aims to be the first choice for businesses, both small and large, as well as property purchasers.
For more information please contact:
Midas Public Relations
Asamaporn (Sam) Anukularmphai