A new Belgian law provides for a range of obligations and limitations for companies collecting debts or unpaid invoices from consumers. This new law enters into force on 1 September 2023.
The Belgian act of 4 May 2023 integrates ‘Book XIX - Consumer debts’ in the Belgian Code of Economic Law (hereafter “CEL”) as new mandatory consumer legislation (hereafter “the Law”).
The Law aims at reinforcing consumer rights by preventing consumers from falling into a negative debt spiral when charged (often immediately) with high default interests, collection costs and/or additional compensation charges, on top of the unpaid invoice amount.
The provisions of the Law enter into force on the 1 September 2023, with immediate effect for any (new) contracts resulting from a B2C-relation. This means that companies only have a few weeks left to adjust their consumer contract terms to comply with the new Law.
For existing contracts, the Law provides for a transition period until 1 December 2023.
So far, companies were, in principle, free (within limits deemed ‘reasonable’) to determine what interests and additional fees were charged to consumers upon late payment of an invoice (past its due date).
From 1 September 2023 (or for existing contracts, from 1 December 2023), article XIX.2 § 2 CEL states that companies will no longer be allowed to charge additional fees or interests if no remedy period of at least fourteen (14) calendar days was granted to the consumer by means of a free of charge first ‘reminder’.
Moreover, article XIX.2 § 3 CEL provides for mandatory information (details) to be included in this reminder (for the reminder to be valid and for the remedy period to start running).
Only after a consumer failed to fulfil his/her payments obligations within the aforementioned remedy period, is the company entitled to claim interests and additional fees. The Law has capped and ‘harmonised’ these fees, which can only be claimed if they have been expressly included in the contractual documents accepted by the consumer.
Concretely, article XIX.4 CEL states that:
o EUR 20, for an outstanding debt no higher than EUR 150
o EUR 30 plus 10% of the amount due on the tranche between EUR 150,01 and EUR 500, for an outstanding debt ranging from EUR 150,01 to EUR 500
o EUR 65 plus 5% of the amount due on the tranche above EUR 500 (with a maximum of EUR 2,000) for outstanding debts higher than EUR 500).
For example, charges that may be claimed from a consumer for an outstanding payment of EUR 1,000 are limited to EUR 90.
It is important for companies carrying out B2C transactions to adapt their contractual terms (contracts, general terms and conditions, invoices), in accordance with the Law, by 1 September 2023, at the latest (or, for existing contracts, by 1 December 2023).
Should a company fail to adapt its clauses relating to unpaid invoices, none of the additional costs it is entitled to (pursuant to the new Law) may be recovered.
Any infringing provisions to this Law will be deemed null and void, and as already mentioned, claims for fixed compensation are only allowed in the event that companies expressly included this right in their relevant contractual documents.
In addition, should economic inspection bodies find infringements after entry into force of the Law, companies risk facing additional penalties and fines.
Should your company require any guidance or help in the review and/or integration of any amendments in your current general terms and conditions or in any other contractual documents, pursuant to this new Law, please do not hesitate to contact us.
Jasmijn is a member of the Commercial team of lawyers at Deloitte Legal. She specialises in general commercial law, commercial litigation and has developed a special focus on contract law. Jasmijn has more than 10 years of experience in advising both national and international clients in all areas of Belgian commercial and contract law. Her experience covers a wide range of industries. Jasmijn assists clients in the conclusion of a wide variety of commercial agreements (commercial intermediaries, manufacturing, sales, contracting, etc.), ranging from the drafting or review of contracts to assistance in contract negotiations. Next to this, Jasmijn represents clients before the Belgian courts or international arbitration centres in the framework of disputes relating to commercial law.