Chapter Four: Debt Collection Management Regulations
Article 7: Mechanism for Setting Deduction Dates from Consumers' Accounts
Creditors must:
- Set the deduction date in accordance with the salary deposit date for salaried consumers, or as agreed upon with the consumer for non-salaried consumers, ensuring it is specified in the finance contract or repayment schedule, considering changes in salary deposit dates, whether continuous or temporary (e.g., when salary deposit date coinciding with weekends or holidays).
- Deduct the installment on the agreed date, and if the agreed date is exceeded due to a creditor's reason without obtaining the consumer's consent for deduction for each case individually after the agreed date, creditors are obliged to add a similar period at the end of the finance period without calculating any term cost or additional fees, with notification to the consumer through authenticated communication means.
- Set the deduction date in accordance with the salary deposit date for salaried consumers, or as agreed upon with the consumer for non-salaried consumers, ensuring it is specified in the finance contract or repayment schedule, considering changes in salary deposit dates, whether continuous or temporary (e.g., when salary deposit date coinciding with weekends or holidays).
Article 8: Installment Deduction Regulations from Consumers' Accounts
1- Creditors are prohibited from:
1-1 Deducting any amounts from the consumer's accounts without a judicial order or ruling, or without obtaining the consumer's consent, or if the finance contract does not permit deduction for banks and finance companies, Or the agreement to deduct the outstanding finance amounts granted without a salary guarantee through the consumer's bank accounts for finance companies.
1-2 Blocking accounts or balances of consumers, even temporarily, and denying them access to funds available in the accounts without a judicial order or ruling, or without obtaining the consumer's consent, or if the finance contract does not permit blocking, without prejudice to the statutory provisions and related provisions in the regulation.
1-3 Deducting more than one installment for each finance contract within a single salary deposit cycle, unless there is a judicial order or ruling, or with the consumer's consent.
1-4 Deducting the installment before the agreed due date, or withholding the installment amount before the due date.
1-5 Withholding or deducting end-of-service gratuities for national consumers, unless there is a judicial order or ruling, or with the consumer's consent.
1-6 Imposing delay penalties or collection fees exceeding the due amount, with a maximum of one installment value for the entire finance period.
2- Creditors must adhere to the deduction limits from the accounts of joint consumers - for joint finance contracts - as agreed with each consumer individually according to the finance contract.
Article 9: Managing Potential Default Cases
1- For the purpose of applying the regulations, creditors must consider calculating default as follows:
1-1 For consumer default on monthly installments:
When it is proven that the consumer has not committed to paying installments fully or partially for three consecutive months, or delays in paying five separate installments for seven working days or more for each installment from its due date throughout the contract period, and for every five years of the real estate finance contract duration.
1-2 Default in finance contracts granted (non-monthly installments):
When it is proven that the consumer has not committed to paying the due installment (quarterly, semi-annually, annually) for more than 60 working days, or delays in paying four separate installments for 20 working days from the agreed due date in the finance contract, or more than five separate months throughout the finance period, and for every five years of the real estate finance contract duration.
2- Creditors must find proactive solutions when indicators of a change in the consumer's credit status appear that may lead to default, including at a minimum:
2-1 Offering the option to reschedule the debt to the consumer if a change in their circumstances is proven (compulsorily) without granting new finance, without any additional fees, and without any change in the term cost. Creditors must execute the rescheduling - if requested by the consumer - within a period not exceeding 20 working days from the date the consumer provides the necessary documents, and creditors must postpone the deduction of installment amounts until the rescheduling procedures are completed.
2-2 Rescheduling the debt for the consumer if the reason is due to the creditor's failure to assess the consumer's creditworthiness, including but not limited to exceeding the statutory deduction ratios, without granting new finance, without any additional fees, and without any change in the term cost.
3- Creditors may offer the option to reschedule the debt to the consumer if a change in their circumstances is proven (optionally), with the possibility of changing the term cost and without any additional fees, provided that the rescheduling is executed - if requested by the consumer - within a period not exceeding 20 working days from the date the necessary documents are provided by the consumer.
Article 10: Managing Default Cases
1- Creditors must, before resorting to competent authorities, ensure communication with consumers and their guarantors for collection purposes, and exert due diligence in managing the settlement and collection of defaulted debts, including but not limited to:
1-1 Establishing necessary standards to ensure employees adhere to the required professionalism, providing consumers with correct and comprehensive information about their current status, the procedures governing collection, and the legal actions that may be taken in case of default or non-compliance.
1-2 Developing internal work procedures between relevant departments, including service level agreements and escalation mechanisms to ensure consumer objections and complaints are resolved within the statutory period in the instructions issued by SAMA related to this matter, with the mechanism documented electronically and the departments' compliance with it is measured.
1-3 Establishing a written policy to organize collection procedures from consumers or their guarantors, approved by the board of directors or manager, as appropriate, considering at a minimum:
a- Solutions that can be offered to the defaulting consumer based on their creditworthiness, including but not limited to debt settlement between two parties, or rescheduling the debt and deferring installments, avoiding financing solutions that may increase the financial burden on the consumer, such as granting additional finance.
b- Procedures through which creditors ensure the consumer is provided with clear and comprehensive information to the fullest extent possible to help them understand collection procedures and the consequences of default, as well as understanding the proposed solutions and the differences between them if more than one solution is offered.
c- Analysis of complaints and objections and their patterns, addressing their causes and sources, and the role of the department responsible for handling complaints in documenting these reports and measuring their effectiveness in addressing the sources of recurring complaints.
d- Reviewing the policy periodically and ensuring its alignment with best practices, statutory provisions, and related instructions, and updating it as needed or every two years at most.
e- Ensuring that employees of creditors and third parties involved in collection tasks are aware of the policy and provide proof of their awareness.
Article 11: Managing Cases of Total Disability or Death
1- Creditors must exempt the consumer and their guarantor from the amounts claimed under the finance contract or joint finance contract - according to their obligations in the finance contract in the event of death or total disability - without making the exemption contingent on the approval of insurance service providers or any external party. Creditors must complete the procedures within a maximum period of thirty days from the date of receipt of the death certificate or total disability report, refund any amounts deducted in excess from the date of death or total disability, and transfer ownership of the financed asset to the consumer - according to the ownership percentage in joint contracts - or their heirs, or release the mortgage - as appropriate - unless the parties agree to include any of the following exceptions:
1-1 Finance contracts concluded before 01/10/2018G.
1-2 Cases of death or total disability resulting from:
a- The consumer deliberately injuring themselves or attempting suicide.
b- Natural disasters.
c- Judicial rulings issued by Saudi courts.
d- Consumption of alcohol, narcotics, or illegal drugs.
e- Participation or training in dangerous sports or competitions, such as: (horse or car racing).
f- Damage caused or contributed to by nuclear weapons, ionizing radiations, radioactive contamination from any nuclear fuel or waste, contamination due to nuclear fuel combustion, war, invasion, acts of foreign enemy, hostilities, warlike acts, or acts of vandalism and terrorism committed by person(s) working individually, on behalf of, or in relation with any terrorist organization.
2- Creditors are prohibited from delaying the procedures for exempting consumers, and they must immediately request the necessary documents, represented by the death certificate or the medical report issued by a competent authority proving total disability, and exert due diligence to process and complete the exemption process within the time frame specified in the regulations.