Many private individuals and entrepreneurs who receive a letter from a collection agency or bailiff are mainly shocked by the extra costs that are imposed. In addition to the principal sum, there are often significant amounts of collection costs, interest and administration costs. But did you know that you are not always obliged to pay all these costs?
In this article we explain what collection costs are, what amounts are legally permitted and how you can defend yourself against unjustly high costs.
What are collection costs?
Collection costs are the costs that a creditor charges for collecting an outstanding debt. These costs are in addition to the original claim.
Examples:
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A telecom company sends you a bill for €100.
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You do not pay on time.
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You will be charged €40 in collection costs and interest.
👉 But the law sets clear limits on what the maximum amount can be charged.
Do you also have to pay interest on an outstanding account?
In addition to collection costs, a creditor is often also allowed to charge interest on the outstanding amount. Whether you actually have to pay interest depends on the type of debt and the agreements in the contract or the general terms and conditions. There are two common situations:- Statutory interest: This is the interest that the law prescribes if you are in arrears. A different percentage applies to consumers than to companies.
- Contractual interest rate: Sometimes a specific (often higher) interest rate is mentioned in the contract or general terms and conditions. However, this may not be unreasonably high.
How many collection costs are allowed?
For private individuals, the statutory collection costs (Standardization of Extrajudicial Collection Costs Act, WIK):
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15% on the first € 2,500 of the claim.
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10% on the next €2,500.
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5% on the next €5,000.
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1% on the next €190,000.
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With a maximum of €6,775.
👉 In addition, a minimum of € 40 in collection costs from consumers applies.
New rules for installment payments from October 1, 2024
From October 1, 2024, there will be separate rules for so-called 'installment payments': bills for services or subscriptions that you pay monthly, such as your energy bill or telephone subscription. These rules only apply to accounts up to and including € 266.67. Maximum collection costs: The collection costs for these installments may amount to a maximum of €140 per six months. That is €40 for the first month that you do not pay and then €20 per month for the following five months. Practical example: Suppose you do not pay your energy bill of € 180 per month in August, October and December. If a collection agency is engaged, they may charge the following:- €40 for August
- €20 for October
- €20 for December
New rules for collection costs for installment payments from October 1, 2024
For monthly bills, such as a telephone subscription or energy bill, separate rules regarding collection costs apply from October 1, 2024. This concerns payment arrears for amounts up to € 266.67 per account. The most important points at a glance:- The maximum collection costs are € 140 per six months per consumer.
- This is made up of €40 for the first month that a bill has not been paid.
- For the following five months, €20 in collection costs may be charged per month.
- For the first missed month: €40
- For the second and third months: €20 extra each time
Common mistakes made by collection agencies and creditors
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Too high percentages charge on top of the debt.
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Charge double costs (for example administration costs and collection costs).
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Calculate costs on a claim that has already been (partially) paid.
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Do not send a 14-day letter to consumers before collection costs are imposed.
What should you do with one reminder letter for multiple accounts?
Do you receive only one reminder letter from the collection agency for multiple outstanding amounts? Then the agency is not allowed to simply charge collection costs for each account separately. In that case, the collection costs are only due once—for the total amount of the invoices together. For consumers, this usually means that you have to pay a maximum of €40 in collection costs, even if there are multiple invoices outstanding. So pay close attention:- You are entitled to a separate 14-day letter per outstanding account.
- Are you only receiving one letter for everything? Then in principle you only owe the costs for the first claim.
How can you dispute unjustly high collection costs?
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Check whether you have received a 14-day letter
For consumers, the creditor must first send a letter giving you another 14 days to pay free of charge. Without such a letter, collection costs are not valid. -
Compare the costs with the statutory scale
Calculate yourself whether the collection costs charged are higher than permitted. -
Appeal
Send a letter or email explaining that the charges are incorrect and that you will only pay the statutory charges. - Pay the original amount on time It is wise to pay the original invoice amount as soon as possible. This often prevents further costs and you may no longer have to pay collection costs.
- Present a defense in court
Are you being summoned? A lawyer can then put up a defense on your behalf and ask the judge to reduce or cancel the costs.
Note: From October 1, 2024, new rules for collection costs will apply to accounts under €266.67. Do you fail to pay several such invoices and do you only receive one reminder letter? Then collection costs may still be charged.Always check carefully whether the reminder is correct and take immediate action if you disagree with the costs.
Where can you file a complaint about a debt collection agency?
Are you dealing with unfair actions or unprofessional behavior from a debt collection agency? You are not alone: you can officially report your complaint. Here are your options:- Complaints Institute for Debt Collection: Most debt collection agencies are affiliated with the Dutch Association of Debt Collection Companies (NVI). Does the agency in question have the NVI quality mark? Then you can file a complaint there via their independent complaints desk.
- Consumer Authority & Market (ACM): If you suspect that the collection agency is not complying with the law, you can report it to the ACM. The ACM enforces rules regarding consumer law and can investigate whether the agency is making structural mistakes.
- dark:bg-indigo-800">Disputes Committee.
- Get legal advice: Are you unable to resolve it yourself, or is the damage (financial or otherwise) extensive? Then consider hiring a legal advisor or legal expenses insurance to help you with your case.
Practical examples
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Example 1 (energy bill): A consumer was charged €300 in collection costs for a €400 bill. This was successfully reduced to the legal maximum of €70.
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Example 2 (webshop): A customer was wrongly charged double administration costs and collection costs. The judge dismissed the additional charges entirely.
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Example 3 (rent arrears): A tenant disputed the collection costs because a 14-day letter was never sent. The judge canceled all collection costs.
Checklist: check collection costs
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📄 Have you received a 14-day letter (consumers)?
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📑 Does the percentage correspond with the legal graduated scale?
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💶 Were there no double charges?
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⏳ Has the claim not been partially paid (for which costs have been charged)?
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⚖️ Hire a lawyer in case of a summons or unjustly high amounts.
Frequently asked questions (FAQ)
1. Do I always have to pay collection costs?
No, only if you do not pay on time after the 14-day letter.
2. What if I have partially paid the debt?
Collection costs may only be charged on the outstanding amount.
3. Can a collection agency charge administration costs in addition to collection costs?
No, double costs are not allowed.
4. What if I have not received a 14-day letter?
Then collection costs from consumers are invalid.
5. Can I get a refund of collection costs that I have already paid?
Yes, with legal defense you can sometimes reclaim unjustly paid costs.
Do I have to pay collection costs for a government account?
For accounts from government agencies—think of theTax Authorities or your municipality—there are separate rules for collection costs. For example, the usual minimum of €40 does not apply to these types of accounts. You only have to pay collection costs if the government has actually incurred costs to collect the amount. No costs, no collection costs. You will often see the government's collection costs directly stated on a writ of execution. This legal document can lead to a bailiff seizing your salary, bank account or assets. Please note that additional costs are associated with sending such a writ of execution. Are you unsure whether the costs charged are justified? Please contact us.Why Arslan Lawyers?
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Specialized in defense against unjustly high collection costs
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Experienced in negotiating with creditors and collection agencies
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Regularly obtain rulings in which collection costs are reduced or canceled
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Help private individuals and entrepreneurs keep control of their financial situation
Conclusion
Collection costs are legally limited. However, many collection agencies charge more than allowed. Therefore, never just pay, but always check whether the costs are correct and object if they are not.