On April 20, 2021, Law No. 21.320 was published in the Official Gazette, which amends Law No. 19.496, on Protection of Consumer Rights (LPDC), regarding extrajudicial collection and other consumer rights, along with establishing transitory measures, in connection with the COVID-19 pandemic.
The most important amendments made by this law correspond to the following:
1. The companies that carry out extrajudicial collection, as well as the credit providers that carry out collection processes, when initiating any action aimed at obtaining the payment of the debt, must inform the means of contact or means of contact so that the consumer can communicate, with respect to the extrajudicial collection actions.
2. It adds a series of principles that must be applied to out-of-court collection actions, regardless of their nature, means of communication or time at which they are carried out, namely: (a) proportionality, (b) reasonableness, (c) justification, (d) transparency, (e) truthfulness, (f) respect for the dignity and physical and psychological integrity of the consumer and (g) privacy of the household.
3. In view of the above, telephone contacts, visits and other actions aimed at extrajudicial collection are limited, and the sending of documents, messages or communications that appear to be or make reference to a writing, resolution or judicial action of any kind is prohibited.
4. Likewise, the supplier shall immediately terminate the extrajudicial collection actions once the consumer has been summoned in a collection lawsuit or a bankruptcy proceeding has been initiated, and the competent court is empowered to order the immediate suspension of the extrajudicial collection actions, when the facts and background information provided so require.
5. Certain provisions of the LPDC, such as default interest rates and the system for calculating the expenses generated by extrajudicial collection, shall also be applicable to money lending transactions in which the entities supervised by the CMF are involved.
6. The range of application of Paragraph 3°, on consumer credit, is extended to all suppliers and to all consumer transactions governed by the LPDC, even when they do not involve the granting of credit to the consumer.
7. Finally, in view of the current health circumstances and restrictions, it is provided that, during the state of constitutional exception of catastrophe due to public calamity, due to the COVID-19 pandemic, out-of-court collection calls or visits may be made only twice a month, with respect to each debtor.