FMA approves first 'credit service providers' for purchasing troubled loans
Austriaâs Financial Market Authority (FMA) has approved the first credit servicers under the new Credit Servicers and Credit Purchasers Act (KKG). The law aims to regulate the sale and management of non-performing loans while protecting borrowersâ rights. Banks must now follow stricter rules when transferring distressed debts to third parties.
The KKG introduces new safeguards for borrowers whose loans are sold to credit servicers. These firms, often already licensed as commercial debt collectors, must obtain FMA approval before managing such debts. The law ensures that all original loan terms remain unchanged, preventing any disadvantage to the borrower.
Banks are required to report the sale of non-performing loans to the FMA. Borrowers must receive clear and timely notification when their loan is transferred, including details of the new servicer. Communication with the borrower will then shift from the bank to the credit servicer, though their legal rights stay the same. The FMAâs banking supervision division will oversee these servicers, enforcing strict conduct rules. These include fair treatment standards, data protection, and proper communication with borrowers. The KKG also promotes transparency in the secondary market for distressed loans, allowing servicers to acquire non-performing debts from struggling banks. The FMA has published the names of the first approved credit servicers under the new law. For the latest list of authorised firms, borrowers and banks can check the FMAâs official approval register or news page.
The KKG strengthens protections for borrowers while creating a regulated market for non-performing loans. Credit servicers must now comply with FMA oversight, ensuring fair and transparent debt management. Borrowers retain their original contract terms, with no loss of rights under the new system.
