Invest1 publisher2 min readPublished
FSS inspects NICE Credit Information over emails that may have breached a seven-contact ceiling
An FSS official says emails went out repeatedly to debtors whose loans NICE was collecting for other financial companies. The ceiling under review allows seven contacts in seven days for each debt.
The Investor · Invest desk
What happened
- The Financial Supervisory Service is conducting an on-site inspection of NICE Credit Information, financial industry sources said on the 13th, after signs the firm exceeded the legal cap on collection contacts.
- Under the Personal Debtor Protection Act, a collector may not make more than seven collection contacts by phone, text message or visit over seven days for each individual debt.
- The excessive collection is understood to have involved emails that were sent in error because of computer system problems at the firm.
- According to sources, the FSS plans to check compliance with the Fair Debt Collection Practices Act and the Credit Information Use and Protection Act as well as the debtor protection law.
- The FSS fined NICE Credit Information 125.6 million won in 2022 for violations that included repeatedly mailing notices to people who were off-limits for debt collection.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- exposure The debts were entrusted to NICE by other financial companies, so those lenders' collection files are now inside a supervisory inspection of a vendor's mail system that they did not run.
- constraint Because the count runs against each individual debt, compliance sits in software: a counter that increments across every channel and knows which account it belongs to, or a queue that retries becomes a breach.
- precedent A second FSS action over repeated written contact at the same firm puts whatever controls NICE built after the 2022 fine into the scope of this inspection.
The ceiling permits one contact a day for each individual debt, on average [13], and the ban on contact by any means between 9 p.m. and 8 a.m. the following day [9] leaves a lawful window thirteen hours long [14].
An FSS official said, "In the course of collecting debts entrusted by other financial companies, emails were repeatedly sent to some debtors" [4]. On the statute, the official said: "The Personal Debtor Protection Act sets a ceiling on the total number of collection contacts, and we are looking into whether that was violated" [5].
The ceiling as described covers contacts by phone, text message or visit [8], and what is under inspection is email [2], so the regulator has to settle whether an automated message counts toward the seven the way a call does.
The 2022 case at the same firm ran wider than the mailings. The FSS found NICE had failed to notify debtors before starting collection and had contacted third parties in breach of the rules, and three employees were disciplined, including pay cuts [12].
The FSS may accept that the emails went out in error because of computer system problems [6], order a fix, and price the breach cheaply. Or it may find no per-debt counter was running across channels at all, in which case the bug is evidence rather than cause. Or it may decide email sits outside the three channels the ceiling names [8], and the case moves off the contact count.
In my view the second is the likeliest, because the official's own phrasing is a ceiling on "the total number of collection contacts" [5], and a total is something a system either counts or does not. A system error explains how the messages left the building, but it does not change how many the law allowed.
The report does not state how many debtors received the repeated emails [16], and any sanction would be built on that count.
What to watch
- Whether the FSS puts a number on the debtors who received the extra emails, since a sanction would scale off that count.
- Whether the review under the Fair Debt Collection Practices Act and the Credit Information Use and Protection Act produces findings beyond the contact ceiling.
- Whether the financial companies that entrusted the debts are asked for their own contact records.