FAIR DEBT COLLECTION PRACTICES ACT
Act No. 9418, Feb. 26, 2009
Amended by Act No. 10465, Mar. 29, 2011
Act No. 11164, Jan. 17, 2012
Act No. 11461, jun. 1, 2012
Act No. 12594, May 20, 2014
The purpose of this Act is to contribute to the development of fair practices in debt collection by deterring debt collectors from abusing their rights or using unlawful methods in debt collection and the protection of decent lives and peaceful living of debtors while ensuring the due exercise of creditors' rights.
The definitions of terms used in this Act shall be as follows: <Amended by Act No. 11465, Mar. 29, 2011; Act No. 12594, May 20, 2014>
| 1. | The term "debt collector" means any of the following persons: |
| (a) | A credit business entity, a loan brokerage company, a person who actually engages in credit business without making registration of credit business, a credit financial institution, or a person to whom a debt under a loan agreement has been assigned or re-assigned by any of the aforementioned persons under the Act on Registration of Credit Business and Protection of Finance Users; |
| (b) | A creditor of a monetary loan other than those specified in item (a), or a person to whom a debt has been assigned or re-assigned by such creditor; |
| (c) | A person to whom a pecuniary claim produced as a result of commercial activities under the Commercial Act has been assigned or re-assigned; |
| (d) | A person who collects debts on behalf of another person in return for, or under a promise of, money or any other economic benefit paid as consideration (including a person who pretends to have a debt assigned for the purpose of debt collection); |
| (e) | A person who collects debts for the persons specified in items (a) through (d) as an employee, contractor, delegate, or for any other reason; |
| 2. | The term "debtor" means a natural person (including a guarantor) who owes an obligation to pay a debt or who is alleged by a debt collector to owe an obligation to pay a debt; |
| 3. | The term "related person" means a person who lives or makes a living together with a debtor, a debtor's relative, or a person who works together with a debtor in a workplace; |
| 4. | The term "debt collection" means any activity conducted for the satisfaction of a debt, such as investigation into the whereabouts of a debtor and his/her property, demands to pay a debt, and the receipt of payments from a debtor; |
| Article 3 (Responsibilities of State and Local Governments) |
| (1) | The State and each local government shall formulate systems and conditions to establish fair practices in debt collection and implement a policy therefor. |
| (2) | The State and each local government shall endeavor to protect debtors and their related persons from debt collectors who abuse their rights or commit unlawful acts in debt collection. |
| Article 4 (Relations to other Acts) |
Except as otherwise provided for in any other Act, debt collection shall be governed by this Act.
| Article 5 (Issuance of Debt Certificates) |
| (1) | Every debt collector (limited to the persons specified in subparagraph 1 (a) of Article 2; hereafter the same shall apply in this Article) shall, upon receiving a request from a debtor to issue a document certifying a debt (hereinafter referred to as "debt certificate"), such as the principal, interest, expenses, and payment term, comply with the request, unless there is any justifiable reason to the contrary. |
| (2) | Every debt collector may demand a debtor to reimburse the expenses directly incurred in issuing a debt certificate within the extent prescribed by Presidential Decree. <Amended by Act No. 11164, Jan. 17, 2012> |
| Article 6 (Notification of Delegation) |
| (1) | Any debt collector (referring to any person specified in subparagraph 1 (d) of Article 2 or a person who collects debts for such person as an employee, contractor, or delegate or for any other reason; hereafter the same shall apply in this Article) who is delegated by a creditor to collect a debt shall notify the relevant debtor of the following matters in writing (including an electronic document under subparagraph 1 of Article 2 of the Act on Electronic Documents and Transactions) before starting the debt collection: Provided, That the same shall not apply where a debtor consented that such notification is unnecessary: <Amended by Act No. 11461, Jun. 1, 2012; Act No. 12594, May 20, 2014> |
| 1. | The name, designation, or contact information of the debt collector (including the name and contact information of the debt collection officer, if a debt collector is a corporation); |
| 2. | Matters concerning the debt, such as the name or designation of the creditor, the amount of the debt, and the duration of default on payments of the debt; |
| 3. | Matters concerning a payment account, such as the payment account number and the account name. |
| (2) | If the agreement under which a debt was incurred includes an acceleration clause, notice shall be given immediately after the debtor forfeits the benefit of time, notwithstanding paragraph (1). |
| (3) | If the agreement under which a debt was incurred is for the continuous provision of services, notice shall be given immediately upon termination of the agreement due to non-repayment of the debt, such as delay in payments of service fees, notwithstanding paragraph (1). |
| Article 7 (Prohibition against Multiple Delegation of Debt Collection for Single Debt) |
No debt collector shall delegate debt collection to two or more persons simultaneously for a single debt.
| Article 8 (Prohibition against Registration of Information about Non-Repayment of Debt) |
No debt collector (referring to any person specified in subparagraph 1 (a) or (d) of Article 2 or a person who collects debts for such person as an employee, contractor, or delegate or for any other reason; hereafter the same shall apply in this Article) shall register a debtor as a defaulter with the credit information concentration institution or on the electronic credit information system of a credit information business entity under the Use and Protection of Credit Information Act, where a lawsuit filed by the debtor to contest the existence of the debt is still pending. In such cases, if such debtor has been already registered as a defaulter, the relevant debt collector shall delete the registration of the defaulter within 30 days from the day on which he/she becomes aware of the fact that a lawsuit filed to contest the existence of the debt is still pending. <Amended by Act No. 12594, May 20, 2014>
| Article 8-2 (Prohibition against Contact with Debtor in Cases of Appointing Agent) |
No debt collector, other than the following persons, shall pay a visit to the debtor, nor deliver words, writings, sound, images or goods to a debtor in connection with the debt, where the debtor has appointed an attorney-at-law, law firm, limited liability law firm, or law firm partnership under the Attorney-at-Law Act as an agent to respond to debt collection and notified a debt collector thereof in writing: Provided, That where the debtor and his/her agent reached an agreement or there is any justifiable cause that makes the debt collector unable to reach the agent, the same shall not apply: | 4. | An ordinary creditor of a monetary loan, other than those specified in subparagraph 1 (a) of Article 2; |
| 5. | A person who collects debts under employment for, or delegation by, the persons specified in subparagraphs 1 through 4 (Provided, That where a debt collector is a credit business entity, a loan brokerage company, or a person who actually engages in credit business without making registration of credit business under the Act on Registration of Credit Business, etc. and Protection of Finance Users, he/she shall be excluded herefrom). |
[This Article Newly Inserted by Act No. 12228, Jan. 14, 2014]
| Article 8-3 (Prohibition against Contact with Related Persons) |
| (1) | No debt collector shall pay a visit to a related person, nor deliver words, writings, sound, images or goods to the related person in connection with a debt, except in cases of making an inquiry about debtor’s whereabouts, contact information, a way to find out his/her whereabouts, etc. to collect a debt. |
| (2) | Where a debt collector pays a visit to a related person or delivers words, writings, sound, images or goods to the related person, the debt collector shall notify the related person of the following matters, and shall not disclose any details of a debt or credit information of a debtor: |
| 1. | The name, designation and contact information of a debt collector (including the name and contact information of a person in charge of the duty where a debt collector is a corporation); |
| 2. | The name and designation of a creditor; |
| 3. | Purposes for paying a visit or delivering words, writings, sound, images or goods. |
[This Article Newly Inserted by Act No. 12228, Jan. 14, 2014]
| Article 8-4 (Prohibition against Carrying on Lawsuit) |
No debt collector (limited to any person specified in subparagraph 1 (d) of Article 2 who engages in business of debt collection, and a person who collects debts for such person as an employee, contractor, or delegate or for any other reason), other than an attorney-at-law, shall conduct procedural acts in connection with debt collection. [This Article Newly Inserted by Act No. 12594, May 20, 2014]
| Article 9 (Prohibition against Violence and Threats) |
No debt collector shall commit any of the following acts in connection with debt collection: <Amended by Act No. 12228, Jan. 14, 2014; Act No. 12594, May 20, 2014>
| 1. | Committing assault and battery on, threatening, arresting, or confining a debtor or his/her related person, or using fraud or physical force upon a debtor or his/her related person; |
| 2. | Seriously disturbing privacy or peace in business by repeatedly or at nighttime (referring to the duration beginning at nine O'clock in the evening and ending at eight O'clock the next morning; hereinafter the same shall apply) paying visits to a debtor or his/her related person without any justifiable reason to arouse fear or apprehension; |
| 3. | Seriously disturbing privacy or peace in business by repeatedly or at nighttime delivering words, writings, sound, images, or goods by phone or any other means without any justifiable reason to arouse fear or apprehension; |
| 4. | Informing any person other than a debtor (including a guarantor, notwithstanding subparagraph 2 of Article 2) of untrue facts with regard to a debt; |
| 5. | Seriously disturbing privacy or peace in business by coercing a debtor or his/her related person to prepare money for repaying a debt by borrowing money or in any similar way to arouse fear or apprehension; |
| 6. | Seriously disturbing privacy or peace in business by demanding any person, other than a debtor, who does not owe any legal obligation to repay a debt on behalf of a debtor to arouse fear or apprehension; |
| 7. | Unnecessarily informing any person other than a debtor of debt-related matters, such as the amount of debts, the period of default at a place related to the debtor’s private life or work, such as a debtor’s home and workplace where a number of people are gathered. |
| Article 10 (Prohibition against Divulgence of Personal Information) |
| (1) | No debt collector shall divulge credit information or personal information that comes to his/her knowledge about a debtor or related person in connection with the incurrence of a debt or debt collection to any other person, nor use such information for any purpose other than debt collection. |
| (2) | Where a debt collector provides credit information or personal information in accordance with any other Act shall not be deemed the divulgence or use under paragraph (1). |
| Article 11 (Prohibition against Misrepresentation) |
No debt collector shall commit any of the following acts against a debtor or his/her related person in connection of debt collection:
| 1. | Expressing his/her intent to collect any invalid or non-existent debt; |
| 2. | Using any words, writing, sound, image, goods, or any other sign misleading someone to believe that the act is conducted by a court, prosecutors' office, or any other State agency; |
| 3. | Misrepresenting legal authority or status for debt collection; |
| 4. | Misrepresenting that legal proceedings, civil or criminal, are pending in connection with debt collection, although such proceedings are not pending; |
| 5. | Using the name of any other person or organization for debt collection without due authority. |
| Article 12 (Prohibition against Unfair Conduct) |
No debt collector shall commit any of the following acts in connection with debt collection: <Amended by Act No. 12594, May 20, 2014>
| 1. | Publicly expressing his/her intent to collect a debt, to a debtor or his/her related person, by taking advantage of any situation in which a debtor has difficulties in responding to debt collection, such as a wedding ceremony or funeral; |
| 2. | Inquiring of any person related to a debtor about the debtor's whereabouts or contact information, how to find out the debtor's whereabouts, or any similar information, in spite of having no difficulty in finding out the debtor's whereabouts, such as the interruption of contact with the debtor; |
| 3. | Incurring telecommunications expenses on a debtor's account by making collect calls or in any other way without a justifiable reason; |
| 4. | Repeatedly demanding to repay a debt in any way other than the proceedings prescribed by relevant statutes, knowing that the debt has been fully or partially discharged by the proceedings for rehabilitation, bankruptcy, or personal rehabilitation under the Debtor Rehabilitation and Bankruptcy Act; |
| 5. | Making the fact of indebtedness known to any person other than the debtor by demanding the repayment of a debt by postcard or in any other way (excluding any act falling under subparagraph 7 of Article 9). |
| Article 13 (Prohibition against Demanding Unreasonable Expenses) |
| (1) | No debt collector shall demand a debtor or his/her related person to pay expenses incurred in debt collection for which the debtor is not liable or to pay expenses in excess of the amount actually incurred. |
| (2) | Necessary matters concerning paragraph (1), including the scope of the expenses incurred in debt collection which a debt collector may demand a debtor or related person to pay, shall be prescribed by Presidential Decree. <Amended by Act No. 12594, May 20, 2014> |
| Article 13-2 (Issuance of Expense Statement) |
| (1) | Where a debt collector is a business entity (referring to any person specified in subparagraph 1 (a) or (d) of Article 2 and a person who collects debts for such person as an employee, contractor, or delegate or for any other reason; hereinafter the same shall apply), a debtor or related person may request such business entity to issue a document stating the expenses incurred in debt collection by item (hereinafter referred to as "expense statement"). |
| (2) | Upon receipt of a request for the issuance of an expense statement under paragraph (1), a debt collector shall issue an expense statement without delay unless there exists any extenuating circumstance, and shall not demand a debtor or related person to pay the expenses incurred in issuing the expense statement. |
[This Article Newly Inserted by Act No. 12594, May 20, 2014]
| Article 14 (Liability for Damage) |
Any debt collector who has inflicted damage on a debtor or his/her related person in violation of this Act shall be liable for the damage: Provided, That the same shall not apply to cases where a debt collector is a business entity (referring to any person specified in subparagraph 1 (a) or (d) of Article 2 or a person who collects debts for person under employment, contract, delegation, etc.; hereinafter the same shall apply) and the business entity proves that such damage has not been caused by intention or negligence of the business entity. <Amended by Act No. 12594, May 20, 2014>
| Article 15 (Penalty Provisions) |
| (1) | Any person who commits assault and battery on, threatens, arrests, or confines, or uses fraud or physical force on a debtor or his/her related person shall be punished by imprisonment with labor for not more than five years or by a fine not exceeding 50 million won. |
| (2) | Any of the following persons shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 30 million won: <Amended by Act No. 12594, May 20, 2014> |
| 1. | A person who is not an attorney-at-law and carries on a lawsuit in connection with debt collection in violation of Article 8-4; |
| 2. | A person who violates any provision of subparagraphs 2 through 7 of Article 9; |
| 3. | A person who divulges credit information or personal information of a debtor or his/her related person, or who uses such information for any purpose other than debt collection, in violation of Article 10 (1); |
| 4. | A person who expresses his/her intent to collect a debt in violation of subparagraph 1 of Article 11. |
| (3) | Any of the following persons shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding 10 million won: <Amended by Act No. 12228, Jan. 14, 2014> |
| 2. | A person who uses words, writings, sound, images, goods, or any other sign in violation of subparagraph 2 of Article 11. |
| Article 16 (Joint Penalty Provision) |
Where the representative of a corporation, or an agent, employee, or servant of a corporation or individual commits an offense under Article 15 in connection with the business affairs of the corporation or individual, not only shall such an offender be punished accordingly, but also the corporation or individual shall be punished by a fine prescribed in the relevant Article: Provided, That the same shall not apply to cases where such corporation or individual has not been negligent in giving due attention and supervision concerning the relevant affairs to prevent such offense.
| Article 17 (Administrative Fines) |
| (1) | Any of the following persons shall be punished by an administrative fine not exceeding 20 million won: <Amended by Act No. 12228, Jan. 14, 2014> |
| 1. | A person who fails to comply with a request for issuing a debt certificate in violation of Article 5 (1); |
| 2. | A person who pays a visit to a debtor or delivers words, writings, sound, images, or goods to a debtor in violation of Article 8-2; |
| 3. | A person who violates subparagraph 1 or 2 of Article 12; |
| (2) | Any of the following persons shall be punished by an administrative fine not exceeding ten million won: <Amended by Act No. 11461, Jun. 1, 2012; Act No. 12228, Jan. 14, 2014; Act No. 12594, May 20, 2014> |
| 2. | A person who delegates debt collection to two or more persons for the same debt in violation of Article 7; |
| 3. | A person who registers a debtor as a defaulter, although a lawsuit to contest the existence of a debt is pending, or who did not delete the registration of a defaulter within 30 days, knowing that such lawsuit is pending, in violation of Article 8; |
| 5. | A person who violates any provision of subparagraphs 3 through 5 of Article 11; |
| 6. | A person who demands expenses incurred in debt collection in violation of Article 13; |
| 7. | A person who fails to issue an expense statement in violation of Article 13-2 (2). |
| (3) | Any person who violates any provision of subparagraph 3, 3-2, 4, or 5 of Article 12 shall be punished by an administrative fine not exceeding five million won. <Amended by Act No. 12594, May 20, 2014> |
| (4) | If any person falling under paragraph (1) 3, (2) 2, 5, 6 or (3) is not a business entity, the administrative fines prescribed in the applicable provision shall be reduced by 1/2 of the applicable maximum amount. <Amended by Act No. 12228, Jan. 14, 2014> |
| Article 18 (Imposition and Collection of Administrative Fines and Delegation of Authority) |
| (1) | Administrative fines under this Act shall be imposed and collected by the supervisory agency authorized, permitted, or registered under other Acts, concerning the person subject to the administrative fines, if such agency exists, or otherwise by the Special Metropolitan City Mayor or a Metropolitan City Mayor, a Do Governor, or the Governor of a Special Self-Governing Province, as prescribed by Presidential Decree. |
| (2) | Any supervisory agency under paragraph (1) may delegate part of its authority for the imposition and collection of an administrative fine to the head of each Si/Gun/Gu, as prescribed by Presidential Decree. |
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Notification of Delegation)
Article 6 shall apply, starting with the first debt collection delegated by a creditor after this Act enters into force. Article 3 (Applicability to Prohibition against Multiple Delegation of Debt Collection for Single Debt)
Article 7 shall apply, beginning with the first debt collection delegated after this Act enters into force. Article 4 (Transitional Measure concerning Penalty Provisions and Administrative Fines)
In applying penalty provisions to, or imposing an administrative fine for, any act committed before this Act enters into force, such act shall be governed by the previous corresponding provisions.
Article 5 Omitted.
ADDENDA <Act No. 10465, Mar. 29, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDUM <Act No. 11164, Jan. 17, 2012>
This Act shall enter into force six months after the date of its promulgation.
ADDENDA <Act No. 11461, Jun. 1, 2012>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 10 Omitted.
ADDENDUM <Act No. 12228, Jan. 14, 2014>
This Act shall enter into force six months after the date of its promulgation.
ADDENDUM <Act No. 12594, May 20, 2014>
This Act shall enter into force six months after the date of its promulgation.