ECONOMY

Laws to tighten on debt collectors

A parliamentary commitee is expected to finalize a draft bill in coming days, tightening laws on debt collection agencies as demand for their services soars due to the widening economic crisis. Following a series of complaints made to the Ombudsman and General Secretariat for Consumer Affairs concerning improper practices, it was decided to implement some changes, said a senior Development Ministry source. The draft bill is expected to be turned over for public debate once it is finalized. Data on the number of debt collection agencies operating in Greece are sketchy, with some estimates putting the figure at around 100, ranging from small independant operators to larger companies. Complaints made to authorities over the tactics they have adopted include harassing people and threating the physical safety of those late in meeting payments. The practice of using agencies to collect payment is not limited to banks but has spread to a broad range of firms. State-controlled companies, such as OTE telecom and the Public Power Corporation (PPC), retailers and insurance firms are among those now using their services. The introduction of an improved legal framework will pave the way for the entry of more players into the sector, according to an industry source. Data show that the amount of loans more than three months overdue in Greece as of June reached 11 billion euros, or 4.7 percent of the total amount. Experts warn this figure will rise as economic conditions worsen and harm households’ abilities to meet financial obligations. Greece’s economy is heading for a further slowdown next year as the global crisis spreads and harms two of its key industries, shipping and tourism. Experts are also predicting an upswing in the jobless rate to 8 percent from 7.5 percent this year.