In times of rising prices for energy, food and housing, people in the Netherlands and Belgium are finding it increasingly difficult to meet all costs. In many cases, this results in payments being missed or not completed, which in turn leads to companies having to contact consumers about the outstanding sums.
In both countries, consumer protection is very important and the law stipulates exactly how the first, out-of-court communication must take place. We take a look at the current financial situation of the Dutch and Belgians, the so-called WIK letter in the Netherlands and the 14-day letter in Belgium, which has become mandatory there since September 2023.
More than half a million households in the Netherlands have problems with debt and 60% of Dutch people struggle to make ends meet or are financially vulnerable due to high fixed costs and rising expenses (Deloitte, Leiden University & Nibud). The research also shows that among young adults between the ages of 18-35, as many as 70% had payment problems in 2022. Almost a third of Dutch people sometimes pay bills late, and even more people worry about money.
We are noticing more and more often that consumers are experiencing payment bottlenecks, especially at short notice. That’s why it’s particularly important to signal to consumers that we, as a debt collection company, are there to help them in word and deed in order to find a quick and optimal solution for all parties involved. Our digital approach helps to avoid feelings of shame that can arise. No one has to contact us in person to make an instalment payment, for example, but can do so quickly and easily online.Daniela Straube, Country Head Benelux at PAIR Finance
Since 2012, when consumers in the Netherlands are behind with their payments, they are required by law to receive the so-called « WIK letter » as a reminder. This letter informs consumers that they now have 14 days to pay their unpaid bill without additional costs before reminder costs are incurred and the collection process is initiated.
The name WIK Letter is derived from the Debt Collection Charges Act (in Dutch « Wet Incasso Kosten », or « WIK » for short). The WIK regulation defines exactly which costs consumers in the Netherlands have to pay for debt collection. The WIK letter has the word letter in its name, but it can also be sent in the form of an email. The 14-day rule applies to e-mails just as it does to letters.
Before companies can appoint a debt collection company for outstanding amounts in the Netherlands, they are obliged to send the WIK letter to their customers. Alternatively, companies and debt collectors can agree that the debt collector sends the WIK letter instead of the client.
|The Dutch WIK letter must contain the following information:|
– the outstanding amount or remaining amount
– the information that collection costs and legal interest will be charged if payment is not made within 14 days
– the exact amount of the collection costs
– the period within which the debt must be paid before costs, interest or compensation can be claimed
In Belgium, too, people’s financial situation is difficult. More than 60% of private households in Belgium are in debt (CEIC Data) and around 64% of Belgians have difficulties paying their bills (Deloitte, Ghent University & Argenta). Half of Belgian families do not plan more than one month ahead financially, according to the Deloitte survey mentioned above, and on top of the already rising prices, Belgium remains one of the countries with the highest taxes in Europe. Single workers without children in Belgium who earn an average wage (€3,486 gross) have to deduct almost 52.3% of their income for taxes.
In Belgium, new rules for the collection of debts from consumers have been in place since the 1st of September 2023. Since this year, the Belgian Economic Code (Code de droit économique) stipulates that – similar to the Netherlands – a 14-day letter must be sent to consumers with debts. In Belgium, however, this letter is not called the WIK letter.
The new law aims to provide Belgian consumers with a higher level of financial protection. Therefore, this letter as a first reminder must also be free of charge. This means that Belgian consumers must be given the opportunity to pay the outstanding amount without additional costs. Only after a certain period of time the late payment may be sanctioned. In the case of a postal letter, this is 14 days plus three days’ delivery time. In the case of email, customers have only one day extra to react to the 14 days.
The legal requirements in Belgium are more detailed than in the Netherlands. For example, the first reminder must always indicate the specific product that has not been paid for.
|The Belgian 14-day letter must contain the following information:|
– the debt amount or remaining amount owed
– a description of the product from which the debt arose
– the amount of compensation required if the payment is not made within the 14-day period
– the name and company number of the creditor company
– the due date of the debt
– the time limit within which the debt must be paid before costs, interest or compensation can be claimed
Would you like to learn more about how debt collection and receivables management works in the Benelux market and are you looking for a strong partner with an AI-based debt collection solution? Our team will be happy to advise you.