Law No. 98-4 of February 2, 1998, Concerning Debt Collection Companies

Loi n°98-4 du 2 février 1998, relative aux sociétés de recouvrement des créances 88 Loi n° 98-4 du 2 février 1998, concerning Debt Collection Companies In the name of the people, The Chamber of Deputies having adopted, The President of the Republic promulgates the law as follows:
Article 1.
This law sets forth provisions regarding debt collection companies, as well as the conditions and scope of their activities.
Article 2.
Debt collection companies are joint-stock companies subject to the provisions of the Commercial Code, insofar as this law does not provide otherwise.
Article 3.
The object of debt collection companies is the purchase of debts for their own account and the collection of debts on behalf of third parties.
Article 4 (new) – Law No. 2001-91 of August 7, 2001, simplifying specific procedures for administrative authorizations issued by the Ministry of Finance services in related activities.
The exercise of debt collection companies' activities is subject to a terms of reference approved by decree of the Minister of Finance after consultation with the Governor of the Central Bank of Tunisia.
Article 5 (new) – Law No. 2001-91 of August 7, 2001, simplifying specific procedures for administrative authorizations issued by the Ministry of Finance services in related activities
Notwithstanding sanctions provided by current legislation and regulations, the Minister of Finance may impose the following sanctions on any debt collection company failing to comply with the terms of reference referred to in Article 4 above, after hearing the concerned company:

• a warning;
• a reprimand,
• a fine of up to 10,000 dinars, collected for the Tunisian Treasury via a liquidation statement issued and made enforceable by the Minister of Finance, executed in accordance with Law No. 73-81 of December 13, 1973, promulgating the Public Accounting Code;
• suspension of activities, following the opinion of the Governor of the Central Bank of Tunisia, in which case the concerned company must cease its activities within a maximum period of one year from the date of the suspension decision, limiting its operations during said period to those necessary for liquidation. This period may be extended by decree of the Minister of Finance upon a reasoned request.
  Article 6 (new) – Law No. 2001-91 of August 7, 2001, simplifying specific procedures for administrative authorizations issued by the Ministry of Finance services in related activities
  The capital of debt collection companies, regardless of their activity volume, must not be less than three hundred thousand dinars, fully paid up at incorporation.
  Article 7.
  The amount of debt purchases held by the debt collection company must at no time exceed five times the amount of its "equity", as defined by Law No. 96-112 of December 30, 1996, concerning the corporate accounting system. Preparatory work: discussion and adoption by the Chamber of Deputies in its session on January 13, 1998.

Loi n°98-4 du 2 février 1998, relative aux sociétés de recouvrement des créances 89
Article 8. Law No. 2001-91 of August 7, 2001, simplifying specific procedures for administrative authorizations issued by the Ministry of Finance services in related activities
No person may administer, direct, commit, or manage a debt collection company:

• if they have been convicted of forgery, theft, breach of trust, fraud, or other offenses punishable by laws on fraud, extortion of funds or securities, theft by a public depositary, issuance of checks without sufficient funds, handling of goods obtained through these offenses, or foreign exchange regulation violations.
  Second dash (new) Law No. 2001-91 of August 7, 2001
• if subject to a final judgment of bankruptcy;
• if they have been administrator or manager of companies declared bankrupt, or subject to a judgment for bankruptcy;
  Fourth dash (new) Law No. 2001-91 of August 7, 2001
• if subject to a final measure of disqualification or revocation;
• if deprived of their civic rights by a judgment,
  No person may simultaneously administer, direct, or manage both a debt collection company and a bank, insurance company, or financial institution.
  Article 9.
  Debt assignment and collection operations on behalf of others, carried out by debt collection companies, are subject to the provisions of the Code of Obligations and Contracts and the Commercial Code regarding debt assignment rules and mandate, insofar as this law does not provide otherwise.
  Article 10.
  Debts that may be purchased by debt collection companies are those that are due, unpaid, and determined in amount, notwithstanding the fact that these debts are evidenced by written agreements or other instruments or debt securities. All debt collection companies may only purchase banking debts when the delay in payment of principal and interest on these debts has exceeded three hundred sixty days from their maturity, and the bank has made the required provisions for these debts. When debts arise from bank accounts, they may be assigned to debt collection companies from the date of notification of the closure of current or deposit accounts. However, no request for ratification of these accounts will be admitted, even for error, omission, or double entry, for entries dating back more than three years, unless the debtor client or the bank has raised objections by registered letter with acknowledgment of receipt within the same period.
  Article 11.
  The assignment of debts to debt collection companies takes effect against the assigned debtor or others from the date of notification of the assignment made to them by a bailiff or notary.
  The notification must be sent to the last address of the assigned debtor, declared to the assignor. It must indicate the assigned debts and the person to or on whose behalf the debtor must make payment.
  Article 12.
  The assignment of debts to debt collection companies automatically transfers ownership of the debt from the assignor, along with its accessories, pledges, and guarantees.
  Debt assignment must be registered in the land registry if the mortgage or guarantees relate to a registered immovable property.
  By derogation from Article 377bis of the Code of Real Rights, debt collection companies may draft assignment contracts for debts secured by a mortgage registered in the land registry, as well as the deed of release of such mortgage.

Loi n°98-4 du 2 février 1998, relative aux sociétés de recouvrement des créances 90
Article 13.
When multiple companies are entrusted with collecting the same debt, the one that first notifies the assignment to the debtor takes priority over others, even if its notification is later in date.
Article 14.
The assignor must deliver to the assigning debt collection company a title establishing the assignment and provide, along with the debt instrument, the means of proof and information available to it that are necessary for exercising assigned rights.
Article 15.
From the date of notification of the debt assignment to the assigned debtor, the latter is considered discharged from their debts only when they repay either directly to the debt collection company or to its substitute.
Article 16.
The debt collection company may manage its clients' debts under a mandate, without limitation of the powers conferred upon it.
It may, pursuant to said mandate, do all that is in the interest of the principal, according to the nature of the matter and commercial usage, collect what is due to the principal, pay its debts, perform all conservatory acts, bring possessory actions, sue the debtor in court, and contract obligations as necessary to fulfill its assigned tasks.
Article 17. (new) – Law No. 2003-42 of June 9, 2003, modifying Law No. 98-4 of February 2, 1998 concerning debt collection companies
The mandate granted to debt collection companies under Articles 9 and 16 of this law does not exempt them from the requirement of legal representation where such representation is mandatory.
Article 18.
It is prohibited for the director of a debt collection company to disclose secrets acquired by virtue of their profession, except in cases permitted by law, under penalty of sanctions provided by Article 254 of the Penal Code.
Article 19.
Any director of a debt collection company who orders or engages in canvassing to bring debtor clients to settle their debts by visiting, directly or through a representative or agent, the home, workplace, place of rest or treatment, or public location of a person, is subject to a fine of three thousand dinars. Any director of a debt collection company is also subject to the same penalty when they purchase or accept a mandate proposed by an intermediary.
Article 20. repealed by provisions of Article 10 of Law No. 2001-91 of August 7, 2001, simplifying specific procedures for administrative authorizations issued by the Ministry of Finance services in related activities
Article 21.
It is prohibited for any director of a debt collection company to create confusion or combine the activities of said company with those of a public officer.
They are also prohibited from using documents or writings resembling judicial or extra-judicial acts for the purpose of obtaining debt payment. Failure to comply with these measures results in the application of sanctions provided by Article 292 of the Penal Code. The present law shall be published in the Official Journal of the Tunisian Republic and enforced as a law of the State. Tunis, February 2, 1998. Zine El Abidine Ben Ali. ---