Law Not Written for Baku Collecting Agency?

Due to the up-to-date updated legislation, the Financial Market Supervision Authority (FIMSA) notified banks of the illegality of cooperation with collectors. At the same time, one of the largest collection agencies in the country - the Baku Collecting Agency (BCA) announced the recruitment of employees, planning to continue activities.

Adjustments to the Law On Advocates and Lawyers, the Code of Civil Procedure and the Code of Administrative Procedure exclude the activity of collectors in Azerbaijan from January 1 of the coming year. Despite this, the collection agency BCA not only does not curtail its activities, but apparently, is preparing to meet the New Year in an expanded format. This was stated by a well-known bank expert and human rights activist, member of the Bar Association Akram Hasanov.

To begin with, the institute of representation in courts ceases to operate in Azerbaijan from next year. Despite a number of negative points that caused protests in the legal community, Hasanov calls the liquidation of reservoirs a positive consequence of sensational legislative amendments, as banks will no longer have the right to transfer information about debtors to third parties. In this regard, the lawyer has already applied to the FIMSA, believing that the structure should notify financial organizations about the illegality of their previous practice.

- Recently, the FIMSA appealed to banking organizations, notifying about the illegality of the transfer of information about debtors to collection offices, Hasanov answered Turan's request. According to the expert, commercial banks initially had no right to give information about their clients to third parties, in this case, collectors, but did so, hiding behind the fact that collectors' offices allegedly represent the interests of financial organizations in court. Thus, the ban on the transfer of information almost did not prevent five to six collectors from not simply keeping the borrowers in fear, but also causing suicide waves in the army of banking customers.

- Until the amendments to the law "On lawyers and advocacy", the Code of Civil Procedure and the Code of Administrative Procedure enter into force on January 1, 2018, collectors may de jure represent bank structures in courts, and naturally they must receive the necessary for this information. I will make a reservation that information about bank customers is provided to collectors exclusively for this purpose. They have no right to exert pressure, call or threaten citizens.

However, we all know that in fact the banks passed information to collectors not to represent their interests in court. Moreover, such cases rarely reached the court. But when people complained to the relevant structures on the pressure, the transfer of information by banks to such offices, financial organizations covered themselves with the right of collectors to represent their interests in courts. Like, it's not forbidden. Admittedly, collectors have good connections in law enforcement agencies and most of their employees are law enforcement officials, and therefore it was difficult to prove the illegality of the format of banks' cooperation with collectors.

According to the expert, legislative amendments de jure deprive banks of the right to transfer information about customers to collectors, since non-members of the Bar Association will not have the right to represent the interests of individuals and legal entities in the courts from next year. Thus, the pressure of a third party will be regarded as an unlawful action of a financial institution that transmitted information about the customer:

- For example, if a member of the collection organization calls a citizen or any unknown person who does not want to introduce himself, he has the right to ask: who and on what basis disposes such data? What is important, in this case, a citizen sues the bank for the transfer of data to a third party and the structure risks receiving a fine. Already from next year, faced with this circumstance, citizens can sue the collector for illegal activities.

So, at the beginning of last week I appealed to the FIMSA so that commercial banks for preventive purposes received a warning about the illegality of their previous practice in connection with amendments to the legislation. The Chamber warned the banks. This was done in case, in the course of the processes against financial structures, the latter declare that they did not know about the consequences arising from the legislative amendments.

According to the expert, the head of the legal support department of the FIMSA Nurlan Babayev publicly acknowledged that since the entry into force of the new legislation, the activity of collectors is illegal and banks have no right to transfer information about clients to them. But here the question arises: if the FIMSA was aware the transfer of such data is not for trial, how can one explain the absence of a corresponding response from the supervisory authority?

It is noteworthy that the FIMSA acts as if it were not a supervisory body and the facts that took place were not subject to its reaction. In my recent appeal, I noted this circumstance, asked about the reasons for the absence of appropriate measures to divulge bank secrecy. However, it was already noted that the banks referred to the fact that the collectors represented their interests in the courts, and this is not prohibited by law. Now such an excuse is impossible.

The expert recognizes that the new legislation will force the collectors to look for workarounds for continuing operations. Asked whether collector offices can use members of the Bar Association for this purpose, Hasanov did not rule out such an opportunity, but admitted that it would be difficult to do this.

- There are few members of the Bar and they do not have time to engage in such activities physically, to sit and ring up bank customers, because we are talking about tens of thousands of borrowers. In addition, these are public figures. The entire list of lawyers will be published on the website of the Bar. Such a format does not suit the specifics of the work of the collector engaged in "knocking out" debts through threats and pressure. Moreover, collectors do not take lawyers, but persons with specific personal data. Imagine a member of the Bar Association calling the debtor. Will he be able to use the methods of the collector, obscene language, threats, or blackmail? For this he will lose membership in the Bar. Physically, technically and professionally, the Bar Association members cannot apply this practice, although I do not exclude that at first there will be attempts by the collectors to hire someone. For example, if I become aware that a member of the Bar Association has summoned a citizen to the collection office, this circumstance will be publicized as an illegal transfer of information about a bank's client to a third party - the collector.

According to the interlocutor, today many collectors are registered as law firms; however the latter also do not have the right to access bank secrecy:

- I head two law firms. From next year they can no longer participate in legal proceedings, and will be limited to legal advice. If the bank has a problem with the client, it cannot apply to a law firm, but only to a lawyer in person.

Of course, collectors will try to adapt to new circumstances. I do not expect that they will simply surrender. However, we do know our job, too, and these facts will be publicized. For example, the Baku Collecting Agency (BCA), the largest and most dangerous collector in Azerbaijan, despite the approved legislation, announced the recruitment of male applicants. Thus, BCA plans to continue its activities. It should be noted that the indirect founder of this collector is the son of the main shareholder of Uni Bank, the chairman of the Supervisory Board of this bank Eldar Garibov. It is no accident that Uni Bank was involved in various incidents.

By the way, the persons who pushed through the mentioned legislative amendments did not initially take into account all the consequences. They did not even think that the new legislation would hit collectors, and I, in turn, was not in a hurry to talk about it publicly and came out after the publication of the legislation, because interested persons could take into account and correct laws in their own interests. Now this cannot be feared; the legal illiteracy of collectors and the persons supervising their interests has led to the fact that collectors have no more right to operate. Theoretically, it cannot be ruled out that the legislation will be amended retroactively in the interests of collectors, but in practice this is impossible, since it is not comme il faut.

Answering the question about the merger of banks and collectors, Hasanov noted his concern about the possibility of such a format for future cooperation:

"I'm afraid that banks will take collectors" staff, but this will reduce the efficiency of the collectors themselves. I repeat, the activity of the collector is very specific; they use special methods, have a specific staff of workers for intimidation and even adapted premises for this. It was illegal before the adoption of the updated legislation, but people were afraid to talk about it openly".

According to our interlocutor, the merger of banks and collectors is possible in the future, however, the collectors will lose from this. As for attempts to further cooperation between banks and collectors, it carries risks for financial organizations.--0--