Data Protection Issues on Global Loan Portfolio Sales

Sancho Guibert, Senior Legal Counsel and Senior Vice President, Citibank España, S.A.

The current economic and financial situation is providing for interesting investment opportunities in consumer loan portfolios owned by banking entities in many countries. While these portfolios may comprise either performing or non performing loans, portfolios of write-off loans are especially challenging for both in-house counsels and external advisors, as certain legal issues may arise as soon as the investor and final purchaser starts all available judicial and non-judicial actions against the debtors once the loan portfolio has been assigned by the initial creditor. The average profile of the debtors of write-off loans will not probably be the best-in-class, as the initial creditor shall have tried all available recovery methods excepting the judicial actions (i.e. frequent recovery phone calls and communications by the collection units of the bank, offerings of payment plans) and, still, the debt has not been paid after an average period of 180 days. Additionally, it should be noted that the behavior of these stressed debtors in default aims to take any available measure towards payment delays (i.e. formal claims before the regulators, alleged fraud reports, commencement of bankruptcy procedures).