(1) Reasons for Proposal
Currently, various financial institutions sell debts whose extinctive prescription has been completed to credit business entities at a lower price than the actual debt price, and credit business entities restore such debts’ extinctive prescription with various methods and collect the debts, which causes long-term severe harm to debtors.
Nevertheless, since debtors do not know whether extinctive prescription has been completed or have a lack of knowledge about the extinctive prescription system, they are not properly responding to debt collectors’ demands.
In this regard, this Partial Amendment aims to impose obligations to notify debtors of objective information about debts such as the extinctive prescription on the credit business entity, credit financial institution, person to whom a pecuniary claim produced as a result of commercial activities, and person delegated by the foregoing to collect debts and ban them from transferring debts whose extinctive prescription has been expired or receiving only the right to collect such debts and demanding debtors to repay such debts in an effort to prevent unfair debt collecting practices and protect socioeconomically vulnerable debtors with small amounts of debts.
(2) Major Provisions
A. Impose obligations to notify debtors of objective information about debts such as the extinctive prescription on the credit business entity, credit financial institution, person to whom a pecuniary claim produced as a result of commercial activities, and person delegated by the foregoing to collect debts (Article 5-2 newly inserted and Article 6 partially amended)
B. Ban the extinctive prescription on the credit business entity, credit financial institution, person to whom a pecuniary claim produced as a result of commercial activities, and person delegated by the foregoing to collect debts from transferring debts whose extinctive prescription has been expired or receiving only the right to collect such debts and demanding debtors to repay such debts (Article 8-5 newly inserted)
C. Impose administrative fines for violating notification obligations and a ban on collecting debts whose extinctive prescription has been expired (Article 17 paragraph 1 subparagraph 3, and Article 17 paragraph 2 subparagraphs 1 and 1-2)
