Following announcements of a reduction of debt sales to debt collection agencies ahead of the expiry of a moratorium on enforced collection, Croatia's Public Ombudswoman Lora Vidovic on Wednesday called for better regulation of the work of those agencies.

Last week, the Finance Ministry put forward draft amendments to the Profit Tax Act, whereby one of the proposed changes is directed at reducing the sale of debts to debt collection agencies.

The ombudswoman Vidovic underscores that although it is welcomed, this measure cannot address the problems facing overindebted citizens exposed to unpleasantness due to a lack of regulations for the work of such agencies.

The press release issued by her office recalls that in her previous annual reports Vidovic recommended that the ministry should draw up legislative proposals regulating the work and remit of those agencies.

A lack of standards and rules for debt collection agencies makes debtors more vulnerable and undermine their human rights, she says.

The system of enforced debt collection operates as a vicious circle in which debtors are paralysed by their debts whereas creditors do not manage to get their receivables paid, she says.

The country’s constitution defines Croatia as a welfare state, and therefore Croatia is “supposed to create conditions for a dignified life of all its citizens,” Vidovic added.