Ukraine reshapes consumer debt collection


Over the past decade, Ukrainian consumers have accumulated and defaulted on large amounts of debt amid intermittent crises and economic downturns. Lenders in turn risked significant losses and resorted to available means of debt settlement. Unfortunately, the fragmented regulation of consumer debt collection has created an excessively uncertain business environment. In this system, bona fide lenders find it difficult to operate transparently while consumers are regularly exposed to unfair practices by bad faith actors.

To combat this very inefficient system, on April 14, 2021, the Ukrainian government promulgated the Law on Debt Collectors1 (the “Right”) Introducing new regulations for the recovery of consumer debts in Ukraine.

As we will explain in detail below, the Law implements fundamental changes concerning (i) the legal status of debt collection companies; (ii) the rules of conduct between lenders / collection companies and debtors; and (iii) the instruments of control and accountability.


Legal status of debt collectors

Collection companies collect debts in the interest of lenders. Both financial institutions (including non-bank entities providing credit or factoring services) and other legal persons have the right to obtain the legal status of collection companies.

If a lender is a financial institution or other legal person authorized to lend funds or provide factoring services, that lender has the right to collect debts in its own interest without acquiring the status of a collection company. The lender, however, still remains subject to the newly introduced rules of conduct. Other lenders should involve a collection company for debt settlement.

Registration of debt collectors

An essential condition for obtaining the status of collection company is registration in a register of collection companies (the “Register now“). For this purpose, a company must file an application with the National Bank of Ukraine (the “NBU”) With a set of accompanying documents (including ownership structure, management and staff information, internal policies for interaction with debtors, proof of payment of state fees, etc.). The set of documents required is considerably reduced for the registration of non-bank financial institutions (as the NBU should already have the majority of the necessary documents on file).

The NBU must make a decision on registration within 30 days on the basis of receiving a full set of documents.

The registry will be established within the next three months and will function as a free public database maintained by the NBU and accessible through the NBU website.

Transparent ownership structure

The law sets out strict requirements to ensure a transparent ownership structure of collection companies. A company / individual cannot own a substantial stake in a collection company if:

  • the company is registered or the individual is a resident of the Russian Federation or other countries facilitating any armed conflict in Ukraine or using military force against Ukraine;
  • the company is located or the individual has a place of registration in the temporarily occupied territory of Ukraine or in the territory of the operation of joint forces (i.e. the eastern regions of Ukraine );
  • the business or individual does not meet the business reputation requirements under NBU regulations;
  • the person has a record of certain administrative, penal or disciplinary offenses.

Separately, the NBU may define certain qualification requirements for directors and employees of a collection company in order to ensure sufficient professional skills.


Collection companies are authorized to communicate with debtors by telephone, SMS and voicemail, personal interviews or correspondence. When communicating with debtors, collection companies must respect ethical rules and expressly refrain from:

  • undermine the dignity of the person and endanger the life and health of a debtor, his relatives and any person related to third parties of the debtor;
  • processing of personal data on state of health, political opinions, religious beliefs, working hours, social networks, place and time of personal meetings, photo and video material;
  • damage corporate reputations, blackmail and threats;
  • manipulate information and provide misleading information about the reasons and amounts of claims and the consequences of non-payment;
  • inform third parties about a debt and make complaints to them (unless the third parties have consented to it);
  • interact with a debtor more than twice a day;
  • make phone calls from 8:00 p.m. to 9:00 a.m. and on weekends and holidays;
  • interact with a debtor after notification that a representative has been appointed to protect the interests of the debtor in the debt settlement process;

Contacts and requests to third parties are prohibited unless the parties have given their consent and the matter is settled in the loan agreement.


By law, only financial institutions can be assignees under a consumer loan agreement and acquire the right of reclamation. If for legal reasons (including succession of rights and obligations) such a claim is assigned to an ineligible assignee, the assignee (i.e. the new lender) would not be able to settle the debt and would be required to use the services of a collection company.

The assignment of a receivable to a new lender or the use of a collection company must be accompanied by a notification to the debtor.


The NBU is responsible for the regulation and state supervision of consumer loans and the settlement of overdue debts in Ukraine. Its main regulatory functions include establishing requirements for lenders, collection companies and debt collection activities; supervision and control of compliance with the requirements of consumer law, including ethical rules for interaction with debtors; and administration of the Registry.

The NBU is empowered to apply a set of measures against lenders and collection companies in the event of non-compliance with the new requirements (including non-compliance with ethical rules, the use of an unregistered company for the debt collection or non-compliance with the mandatory provisions of a consumer loan agreement).

These measures may include:

  • written warnings;
  • fines of up to 136 thousand UAH;
  • temporarily prohibit the collection company from settling debts;
  • deregistration of the collection company; and
  • suspension and cancellation of the financial services license of a non-bank financial institution.

Most of the provisions of this law will come into force three months after its adoption.

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