The Law for Prevention of Aggressive Debt Collection has passed the second and third readings. The amendment has been initiated by the Consumer Council. Israel Consumer Council CEO, lawyer Mr. Ehud Peleg said that today, the Finance Committee has approved an important law that would consolidate consumer legislation to the consumer's right to properly defend himself against false or fictitious debt.
"The law will end the Trying It On Method [Note of the translator: in Hebrew – Shitat Matzlyach = a deliberate attempt to exploit another person's inattentiveness], that has been used more than once in the field of debt collection, in an attempt to take advantage of the consumers' short memory and to prevent them from examining the veracity of debts by avoiding to provide them with supporting documents. Law puts a barrier before the indecent approach of "Have you concealed and also inherited".
The Council thanks Knesset members who have led the law in the current Knesset - MK Yoel Hasson, MK Uri Maklev and to MK Boaz Toporovsky, who has submitted the bill during the previous Knesset and to the Chairman of the Finance Committee MK Eitan Cabel.
Businesses may can take steps to collect what they believe as due amounts of money, until the end of the period of limitation - a period not exceeding seven years. Unfortunately, there is widespread phenomenon of unfounded claims or of proceedings following transactions that were not carried out according to the law; for example, remote sales transactions that were realized without proper disclosure or without a form of statutory disclosure been sent.
We have recently witnessed a phenomenon where many consumers receive threatening letters from lawyers (such as in the "Iqtec" case and others), sent as part of improper collection process. In addition, consumers receive threatening letters as part of the execution of collection process, often with no fault of their own, while they absolutely do not know the company on whose behalf attorneys claim the debt.
In addition, when alleged debtors try to contact the lawyers, they are confronted with a complex bureaucracy, a contemptuous attitude and unprecedented threats in relation to the claim for the payment of the debt.
The bill aims to regulate the way requirements for payment of debt are delivered. According to the proposal, before taking any action to collect money, including legal actions, the business will have to send a letter to the consumer in which will appear the name of the business, the details of the debt, the way it was calculated and proof of the transaction between the business and the consumer.
This move regulates the process of collection of any debt, since consumers are requested to pay and do not know or do not remember at all the transaction and are unable to lawfully defend themselves. As a result, they are faced to considerable expenses in respect of the need for advice or legal services. Providing information will reduce the chance for charging inaccurate or incorrect debts and will prevent excessive profits by lawyers at the expense of clients, when this is not really necessary.