Registration of a Debt Collection Company

Activities related to the settlement of overdue debt in the field of consumer lending are regulated in Ukraine. A company that intends to provide debt collection services on behalf of a creditor or a new creditor must comply with legal requirements and be included in the Register of Debt Collection Companies maintained by the National Bank of Ukraine.

This is not merely a formal registration. The National Bank reviews the business reputation of the company, its managers and qualifying shareholders, ownership structure, internal policies, procedures for interaction with consumers, personal data protection, and the compliance of employees with qualification requirements.

VINCO’S Legal Company supports clients throughout the process of obtaining the status of a debt collection company: from the initial assessment of the business model to the preparation of documents, communication with the National Bank of Ukraine, and receipt of an extract from the Register.

Registration with the National Bank of Ukraine is required for a legal entity that intends to settle overdue debt if all of the following conditions are met:

• the debt arose under a consumer credit agreement or another agreement covered by consumer lending legislation;
• the company acts not in its own interests but on behalf of another person — the creditor or the new creditor;
• the company directly or through engaged persons interacts with consumers regarding the settlement of overdue debt.

The status of a debt collection company may be obtained by a legal entity, including a non-bank financial institution that is entitled to provide factoring services and/or loans, including financial credit.

Not every activity related to debtors is considered debt collection activity for the purposes of special regulation. Registration in the Register of Debt Collection Companies is generally not required for:

• banks;
• non-bank financial institutions that settle overdue debt exclusively in their own interests;
• the Deposit Guarantee Fund, which takes measures to settle debts of insolvent banks;
• legal entities working with other types of debt, such as utility or telecommunications debts.

Before filing documents with the National Bank, it is necessary to check whether the company meets the regulator’s requirements. The key requirements include:

• impeccable business reputation of the applicant, its managers and qualifying shareholders;
• professional suitability of the company’s manager;
• transparent and properly disclosed ownership structure;
• compliance of employees and engaged persons with the qualification requirements of the National Bank;
• internal policies on interaction with consumers, ethical conduct and personal data protection;
• absence of significant violations of consumer protection rules in the financial services sector during the relevant period;
• registered location of the company outside the temporarily occupied territories of Ukraine.

Particular attention should be paid to internal documents regulating communication with consumers, personal data processing, employee training, quality control of communications and compliance with ethical requirements.

The document package depends on the applicant’s status and business model, but usually includes:

• application for inclusion of the legal entity in the Register of Debt Collection Companies;
• questionnaire describing the company’s business intentions;
• questionnaire regarding policies and internal regulations on interaction with consumers, personal data protection, employee training and professional development;
• information on ownership structure, ultimate key participants and qualifying shareholders;
• documents and information regarding managers, qualifying shareholders, employees and engaged persons;
• documents confirming that employees meet qualification requirements;
• internal regulations, policies, consumer interaction rules and documents regarding internal controls;
• document confirming payment of the official fee of the National Bank for review of the document package.

Documents must be prepared using the current forms approved by the National Bank. An incomplete, inaccurate or merely formal document package may result in requests for additional information, extension of the review period or refusal to include the company in the Register.

The National Bank decides whether to include the applicant in the Register of Debt Collection Companies or refuse inclusion within 30 business days from the date of receipt of the complete document package. If the submitted information needs additional verification or additional documents are required, this period may be extended by up to 30 business days.

As of the date of preparation of this material, the official fee of the National Bank for reviewing a document package for inclusion of a legal entity in the Register of Debt Collection Companies is UAH 50,200 for legal entities that are not qualified non-bank financial institutions entitled to provide factoring and/or lending services. The amount of the official fee should be checked according to the current tariffs of the National Bank before filing.

1. Initial consultation and analysis of the client’s business model.
2. Determination of whether the company needs to be included in the Register of Debt Collection Companies.
3. Review of ownership structure, managers, qualifying shareholders and business reputation risks.
4. Development or adaptation of internal policies on consumer interaction, ethical conduct, personal data protection and employee training.
5. Preparation of applications, questionnaires, ownership structure information and other documents for the National Bank.
6. Verification of the completeness of the document package and support in paying the official fee.
7. Filing documents with the National Bank of Ukraine.
8. Communication with the National Bank and preparation of explanations or additional documents if requested.
9. Receipt of the decision on inclusion in the Register and the extract from the Register.
10. Further legal support of the debt collection company’s activities upon the client’s request.

Registration of a debt collection company is highly sensitive to the quality of documents and the applicant’s compliance with regulatory requirements. The most common risks include:

• incomplete or incorrect disclosure of ownership structure;
• signs of non-impeccable business reputation of the applicant, managers or qualifying shareholders;
• absence or purely formal nature of internal policies;
• non-compliance of employees with qualification requirements;
• errors in National Bank forms or use of outdated templates;
• risk of refusal, extension of the review period or repeated filing of documents;
• future risks of regulatory measures for breaches of ethical conduct rules.

The VINCO’S team can help not only prepare the document package but also assess whether the business is ready to operate in a regulated environment. We analyze the company structure, identify key risks, prepare internal documents and support communication with the regulator.

If you plan to provide services for the settlement of overdue debt under consumer credit agreements on behalf of other persons, VINCO’S Legal Company will help you go through the procedure for inclusion in the Register of Debt Collection Companies professionally, systematically and in accordance with the current requirements of the National Bank of Ukraine.