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  • IV. Content of the Regulations

    • 1. Communication with Retail Consumers

      A creditor must apply due diligence when communicating with a retail consumer before seeking recourse in competent judicial authorities, while observing the following: 
       
       
       1.1Authenticated means of communication that a creditor has the right to use when communicating with a consumer or their guarantor are limited to:
       
        -E-mail.
       
       
        -Registered mail.
       
       
        -National address.
       
       
        -SMS messages.
       
       
        -Phone calls.
       
       
       1.2The communication message must include at minimum:
       
        -The creditor’s name and the department concerned with the collection of defaulted payments.
       
       
        -The contact number of the concerned department and/or the third party.
       
       
        -Working hours of the concerned department and/or the third party.
       
       
        -Name of the employee, the creditor and/or the third party if a consumer is contacted through a phone call.
       
       
       1.3A creditor must commit to the following:
       
        -The number of attempts to contact a consumer through their phone number must not exceed ten attempts’ within a period of 30 days, and the retail consumer should have the ability to call back the same number used as used by the creditor in attempting to reach them.
       
       
        -All phone calls received from or made to a retail consumer must be documented and records thereof should be maintained for no less than ten years from the date of the phone call. A retail consumer must be notified at the beginning of the phone call that it is recorded.
       
       
        -A retail consumer should be able to rate their satisfaction at the end of the phone call (incoming and outgoing), which must also be documented electronically.
       
       
        -There must be standards in place to ensure that employees provide consumers with correct information with the utmost professionalism regarding their current default status and the legal actions to which a creditor is entitled to pursue.
       
       
        -A retail consumer must not be provided with inaccurate or illegal information regarding the consequences of default.
       
       
        -A retail consumer must not be reached through envelopes with phrases indicating that the content is information on debt collection or similar
       
       
        -A retail consumer’s financial and personal information should be protected, kept confidential, and not be used except for specific professional and legal purposes with the prior consent of the retail consumer. In addition, communication should not be made with any person other than the retail consumer or their guarantor, and in the case of phones calls, the identity of the person answering must be verified.
       
       
       1.4In the event that a retail consumer objects to the due amount of payment, a creditor shall:
       
        -Document such objection.
       
       
        -Submit a complaint of the retail consumer as per SAMA’s instruction in this regard.
       
       
        -Provide the retail consumer with the estimated period for resolution of their complaint, provided that it does not exceed the statutory period set for resolution of complaints.
       
       
        -Not communicate with the retail consumer to remind them of defaulted payments until the complaint has been resolved.
       
       
        -Advise the retail consumer of the escalation mechanism in place and direct them to the relevant entity in the case of dissatisfaction with the result of resolution and desire to escalate the complaint.
       
       
        -Develop a policy for the analysis of complaints and objections, along with their patterns, to address their root causes. The department concerned with the resolution of complaints shall document such reports and measure their efficiency in resolving the root causes of frequent complaints.
       
       
        -Develop work procedures with relevant departments that cover service level agreements and escalation mechanisms to ensure that retail consumers’ objections and complaints are resolved within the statutory period, provided that the mechanism is documented electronically and the departments’ level of compliance with such mechanism is measured.
       
       
       1.5The department concerned with debt collection and communication and/or the third party must be subject to review and audit by both the internal audit and the compliance departments at the bank or finance company on an ongoing basis in order to ensure the soundness of procedures followed and their conformity with these Regulations and the relevant instructions.
       
    • 2. Debt Collection Procedures

      2.1A bank must not:
       
       
        -Deduct any amounts from a retail consumer’s accounts without a judicial order or ruling or without the retail consumer’s prior consent, or if provided otherwise in the finance contract.
       
       
        -Block accounts or balances of a retail consumer, even if temporarily, and deny them access to funds available in their accounts without a judicial order or ruling.
       
       
        -Deduct more than one monthly installment for each loan within a single pay cycle, unless there is a judicial order or ruling or prior consent is obtained from the retail consumer.
       
       
        -Deduct a monthly installment before the due date agreed upon or withhold an installment payment before the due date, as agreed in the financing contract.
       
       
        -Withhold or deduct end-of-service gratuities payable to retail consumers, unless a judicial order or ruling was issued in this regard.
       
       
      2.2A creditors must set the date of deduction in accordance with the monthly payday, provided that such date is specified in the payment schedule or as may be agreed upon with the retail consumer through any of the authenticated communication means.
       
      2.3A creditor must deduct the monthly installment on the agreed date of deduction. If it is proved that a creditor does not comply with the agreed date of deduction, they shall extend the finance period by a similar term to be added at the end of the period, without any term cost or additional fees, and notify the retail consumer of the same through authenticated communication means.
       
       
      2.4A bank, as per requested by a retail consumer, must reschedule the debt when a compelling change in the circumstances of the retail consumer is proved, without granting any new loan, charging extra fees or changing the term cost. A bank must carry out the rescheduling within a period not exceeding 30 days from the date the individual customer is provided with the necessary documents. This excludes asset-backed finance contracts.
       
       
      2.5A bank, as per requested by a retail consumer, must reschedule the debt in the case that voluntary changes in a retail consumer’s circumstances are proved, with the potentiality to change the term cost but without charging additional fees. Debt rescheduling must be carried out within a period not more than 30 days from the date the necessary documents are supplied by the individual customer. This excludes asset-backed finance contracts.
       
       
    • 3. Procedures for Dealing with Defaulting Consumers

      3.1A creditor must be entitled to take legal actions against any defaulting retail consumer at the competent judicial authorities, and such retail consumer must be notified in the event of default for more than three consecutive months or five separate months throughout the finance period. The last attempt to contact such consumer must be through their national address.
       
      3.2Upon the issuance of a judicial order or ruling against a defaulting retail consumer, a creditor must comply with the said order or ruling, unless both parties (creditor and retail consumer) agree otherwise (for example without limitation, settlement of debt between both parties, debt rescheduling, etc.).
       
      3.3A creditor must take in their consideration the circumstances of any defaulting individual customer that was issued an enforceable judicial ruling against them in favor of the creditor, when providing the necessary guarantees by making available the option of debt rescheduling, with the potentiality to change the term cost and without charging additional fees.