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“We are working on a Pan-European Code of Conduct”. Inteview with Erwin Falkner, FENCA President

Mr. Falkner, in occasion of the FENCA World Congress, which took place in Berlin last September, you have been appointed as the new President of FENCA. Could you tell us something about your professional career?

I have over 23 years of experience in leading companies and associations in the debt collection and credit industry.
I am a native Austrian with an international career as an owner and managing director of the collection company VY NTO GmbH & Co. KG in Germany and managing director of the collection service company DCG Portal B.V. in the Netherlands.
My background is business law with a specialization in international law from the University for Business and Management in Essen.

Which are the main points of your programme and the key goals of your mandate?

It is with great honor that I have been elected to serve FENCA and its members as their President. For the time of my mandate, I have the pleasure to work alongside great, competent colleagues on the FENCA Board with whom we have determined the following priorities:
1.Development of a pan-European Code of Conduct

After several years of negotiations, the General Data Protection Regulation (GDPR) was finally adopted on 14 April 2016 and will enter into force in the spring of 2018. The GDPR significantly changes the EU data protection landscape forcing businesses across the EU (and beyond) to review their internal procedures as to their compliance with the new rules set by the GDPR.
FENCA wants to prepare all debt collection businesses for these upcoming changes and sees the solution in the creation of a pan-European Code of Conduct for the debt collection industry with regard to the GDPR which to be adopted by the EU Commission as
an official rule for the industry. Developing a Code of Conduct means understanding how the current internal processes of debt collection agencies may be conflicting with the GDPR and defining a set of rules on how these processes can be compliant with the GDPR.
Besides these rules on data protection, the Code of Conduct will also collect best practices in order to set a standard for the debt collection industry in the EU and be recognized as a serious and reliable dialogue partner for all stakeholders: the EU institutions, creditors and the consumers.
Our Italian member association UNIREC created such a Code of Conduct on a national level in 2015. It is a successful example of an efficient Code of Conduct for FENCA.“

2.Improvement of the visibility of FENCA

FENCA’s political involvement has grown over the past years and FENCA has been recognized as a serious and reliable partner by the EU Commission. We want to raise more awareness for our work by becoming more transparent to our members and partners. Part of this process is to increase our

According to you, in the next future, will new states become members of FENCA?

FENCA represents 23 members: 19 national associations from EU-member states, as well as the national associations from Norway, Switzerland and Russia. We were pleased to welcome two new national associations from Hungary and Denmark to FENCA just
this year. As a European umbrella association our goal is to represent national associations from all 28 EU member states.
In some countries, there still do not exist organizations uniting the collection business and that is why as a first step, FENCA supports the establishment of local industry associations which can later join FENCA as well.
Two prospective members are currently Slovenia and Cyprus, which we are in close contact with. We aim to see our membership grow by 2-3 members each year.

Are there new projects in progress with some Extra EU Associations?

The strategy of increasing FENCA’s visibility also implies being in close cooperation with other associations and stakeholders in the EU. For instance FENCA is a member of the Industry Coalition for Data Protection (ICDP) and regularly liaises with ACC IS, the
Consumer Credit Information Suppliers’ Association. FENCA also cooperates and exchanges know-how and good practices with its sister organizations in United States of America and Asia.
FENCA also wants to keep a fruitful dialogue with the consumers and therefore, we aim to increase its cooperation with various consumer organizations across Europe in the next three years.

According to you, which will be the impact of the New European data protection regulation on the debt collection activities in Europe?

The adoption of the GDPR is considered a milestone in data protection laws in the EU. It sets many new principles with a tremendous impact. Most of the relevant articles and provisions of the GDPR for the collection industry reflect the concerns that FENCA has
expressed in numerous opinions and personal conversations with representatives of the relevant EU institutions.
The impact of the new provisions is still being assessed and all businesses/sectors need to ask themselves: what are the new obligations under the GDPR which will apply to their business model? What gaps exist between the current state of compliance as opposed to
the standard required by the GDPR? And finally what changes should be implemented in order to comply with the GDPR?
Our solution for the debt collection industry is the Code of Conduct for which we are currently raising funds for in order to get the required legal support to answer these questions.

In our country, the Italian Competition Authority (AGCM) heavily fined some originators and debt collection agencies for unfair debt collection practices, in contrast with the Consumer’s Protection Act. Have there been similar cases in Europe?

The collection industry has still a very controversial image mainly because some collection companies do not follow ethical collection methods and do not treat consumers in a fair way so there are similar cases also on other markets. One of our major goals at
FENCA is to set a guideline for best collection practices and harmonize the legal framework for our industry.
The Code of Conduct which is a very hot project for us now, is aiming at the same direction.

Italy, after Spain, has become the center of important Npl portfolios transactions. According to you, which problems and advantages will this trend generate for debt collection agencies? According to you in the next future, which countries will become the new focus of Npl investors?

Selling NPLs is a preferred strategy by the financial industry to clean up their portfolios and to obtain fresh resources to direct into lending again and thus boost the economic cycle in their country. Additionally, NPL sale creates great opportunities for investors and
also for collection companies servicing portfolios. The challenge is to have experienced companies as servicing platforms which can handle purchased portfolios in an efficient and legal way.
I guess in the near future hot markets for NPL investors will become the CEE region and mainly Greece and the Western Balkans.

In Italy, 2 years ago, UNIREC created a Forum called Unirec-Consumatori in order to ensure an effective cooperation and a constant dialogue between itself and Consumers’ Associations and to promote the respect of best practices. What do you think about this initiative? Have similar initiatives been already set up in other European countries?

FENCA is very much in favor of the active dialogue with consumer groups and this is also one of our priorities on European level. We are also encouraging our members to establish local co-operations, for which the Italian experience can be a good example.

Which typology of debt collection is more common across Europe: mail collection, phone collection, door to door collection or judicial collection?

The collection methods depend very much on the local culture and the legal framework. I would say that phone and mail collection still prevail as an approach but there is a constant notion towards legal collection based on the regulatory changes all across Europe.

Some weeks ago, the Internal Revenue Service, the US Government agency responsible for tax collection and tax law enforcement announced that it plans to begin private collection of certain overdue federal tax and it selected four debt collection agencies to implement this programme. Have similar programmes been already implemented in Europe? Generally, how does taxes debts collection work across Europe?

I would say the American still set the trends and we in Europe need to follow the good practices. Collection companies could be very efficient in working for the tax authorities and help increase the collection of taxes. In Europe there are already some similar projects
like in Germany and UK.

A personal question to conclude and to know better, could you please tell us something about your hobbies?

I’m a passionate skier like my whole family and we dedicate every free time to skiing. It is a different challenge than the daily business or the association work where there are still many mountains to climb.


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