Introduction
In an ideal world, everyone would pay their debts on time, acquire financial products within their means, and avoid issues like overdue accounts or excessive debt. However, unpaid credits and late payments for revolving credit cards in department stores or service contracts like telephone and cable TV are common realities.
The Role of Debt Collection Agencies
To recover overdue accounts, financial institutions, department stores, and service companies often hire debt collection agencies to pressure debtors into settling their financial obligations. While these agencies play a crucial role in debt recovery, it’s essential for consumers to understand their rights and the boundaries of these agencies’ actions.
What Documents Should a Debt Collection Agency Present?
When a debt collection agency contacts you, they must provide specific information and documents proving the legality of your debt, identifying the creditor, and breaking down the debt details. According to Mexico’s Federal Procurator for Consumer Affairs (Profeco), these entities must have a certificate of the debt’s existence and provide all relevant data about the commercial entity that hired them for debt collection.
When informing you about the debt amount, they must detail the principal amount, all types of interests, fees, and additional costs contributing to the debt’s growth. Debt collection agencies can pursue extrajudicial debt collection or negotiate debt restructuring. If a negotiation occurs, Profeco advises that you receive documents supporting the agreement and, upon full payment, a closure letter or no-debt certificate from the commercial entity they represent.
For entities under the financial system regulated by the National Banking and Values Commission (CNBV), debt collection agencies must be registered in the Debt Collection Agencies Registry (Redeco), allowing consumers to identify the financial institution they work for.
What Debt Collection Agencies Cannot Do
Profeco clearly outlines how debts can be collected, with complaints often arising from phone calls and home visits. However, both tactics are permitted with limitations.
- Calls and visits are allowed between 7 AM and 10 PM.
- Agencies must address debtors respectfully and only use contact information provided by the debtor to the commercial or financial entity.
- Using billboards, posters, mass media to publicize debts, or sending correspondence with external legends referring to the debt is prohibited.
- Impersonating legal representatives or using documents implying such representation is forbidden.
- Debt collection agencies cannot receive debt payments; they must be paid directly to the commercial or financial entity.
Where to File a Complaint
In Mexico, the entities that hire debt collection agencies are responsible for overseeing their behavior towards debtors. Therefore, there are two entities to which you can file a complaint:
- For debts owed to commercial entities (e.g., department stores, telecommunications companies), file a complaint with Profeco.
- For debts owed to financial entities (e.g., banks, Sofipos), contact the National Commission for the Protection and Defense of Users of Financial Services (Condusef).
Key Questions and Answers
- What documents should a debt collection agency present? They must provide a certificate of the debt’s existence, creditor information, and a detailed breakdown of the debt amount.
- What are the limitations on debt collection agencies’ actions? They can only contact debtors between 7 AM and 10 PM, must use provided contact information, cannot use public shaming tactics, and cannot impersonate legal representatives.
- Where can I file a complaint if I have an issue with a debt collection agency? For commercial entity debts, file with Profeco; for financial entity debts, contact Condusef.
