Bill 306.

Summary.

The bill establishes rules for extrajudicial collection efforts aimed at obtaining payment or renegotiation of overdue debts in the Republic of Panama (República de Panamá). It would cover private persons collecting directly, through third parties or by assignment, suppliers of goods and services, and entities supervised by the Superintendency of Banks of Panama (Superintendencia de Bancos de Panamá), the General Directorate of Finance Companies (Dirección General de Empresa Financieras) of the Ministry of Commerce and Industries (Ministerio de Comercio e Industrias), the Panamanian Autonomous Cooperative Institute (Instituto Panameño Autónomo Cooperativo), and the Public Services Authority (Autoridad de los Servicios Públicos). Collection must respect dignity, privacy, due process, proportionality, transparency and truthfulness without disrupting household life or employment. The bill defines covered activities, collection agencies, authorized channels, telephone and direct contact, business days and hours, the calendar week, domicile and visits.

Consumers would be entitled to collection efforts that respect personal and family privacy and to clear, complete information about the amount owed, interest and payment options. That information must be provided immediately in a form that creates a record; after verbal contact, a consumer may request it in writing. Agencies may use only channels the consumer supplied and expressly authorized, with a choice of channels offered when the product or service is acquired. The bill prohibits harassment, threats and disclosure of a debt to references, relatives, workplace contacts or other third parties outside the obligation. Collection efforts must stop immediately once a judicial or administrative proceeding to recover the same debt is formally admitted, and remain suspended throughout that proceeding.

Agencies must prove a documented assignment of the obligation or formal authorization from the creditor if the consumer requests proof. Where a third party will collect, the creditor must disclose its identity when the good or service is acquired. A co-debtor, jointly liable debtor or guarantor may be contacted under the same conditions. Once direct contact occurs, no further direct contact is allowed that day. Collection is limited to Monday through Friday from eight in the morning to six in the evening and Saturday from eight in the morning to three in the afternoon, excluding Sundays and holidays or national days of mourning. One telephone contact is permitted per day and one home visit per calendar week; a call and a visit cannot occur on the same day.

Agencies must record every collection effort, including unsuccessful telephone calls and home visits, together with details of the debt, channel, purpose, date and time. They must retain the digital records for two years and provide them promptly, truthfully and completely when requested by the Consumer Protection and Competition Defense Authority (Autoridad de Protección al Consumidor y Defensa de la Competencia), or ACODECO. Further prohibitions concern workplace visits, questions about the reason for nonpayment, communications purporting to be judicial acts, statements about consequences of proceedings that have not begun, payments intended to prevent or interrupt the limitation period, and collection without authority.

Before an assignment or transfer, the original supplier must notify the consumer of the new holder and itemize the balance, interest, surcharges and costs. ACODECO would oversee compliance. The bill adds to Law 45 of 2007 (ley 45 de 2007) a function to hear and sanction collection agency practices and a fine of up to twenty-five thousand balboas (B/.25,000.00) for breaches of these rights, duties and prohibitions. The rules would apply to collection efforts made after commencement even if the underlying acquisition occurred earlier; commencement is set for the day after promulgation. The provisions concern consumers, creditors, collection agencies and suppliers of goods and services, as well as the named supervisory bodies and ACODECO.