Financial credibility of counterparties – where to look for reliable information?

In the business world, the ability to assess the payment credibility of trading partners is crucial for the financial stability of companies and institutions. Businesses today have access to a number of tools to verify the financial condition of counterparties and their debt history.

One of the primary sources of information is the National Register of Debtors (Krajowy Rejestr Zadłużonych, KRZ) where discontinued enforcement proceedings can be checked. In turn, the Repository of Financial Documents (Repozytorium Dokumentów Finansowych, RDF) allows the assessment of the overall financial situation of entities entered in the National Court Register (KRS).

Economic information bureaus (BIGs), commonly referred to as debt registers, also play an important role in collecting and sharing debt data. BIGs operate on the basis of the Act on the Disclosure of Business Information and the Exchange of Business Data, which sets out the rules for the transfer, storage and eventual removal of debt data. They are specialised institutions operating in the form of joint-stock companies that provide key information on both businesses and individuals. Thanks to them, companies can more effectively minimise the risk of dealing with unreliable counterparties and to avoid insolvency problems.

These days the verification of financial credibility is not simply a matter of prudence but the foundation of responsible business management. However, it is worth knowing that the act introduces a number of requirements to protect consumers from unjustified entries in the register.

When does debt information go to a BIG?

Forwarding debt information to a BIG requires the fulfilment of certain statutory conditions. A key step is to send the debtor a call for payment in advance, including a warning of the intention to enter the debtor in the specific bureau’s register of debtors.

For consumers, the minimum amount of arrears is PLN 200 and at least 30 days must have elapsed since the due date. In addition, the creditor is obliged to maintain a one-month waiting period from the date of the demand for payment – only after this time can the debt data be forwarded to a BIG.

For businesses, i.e. non-consumer debtors, the legislator has provided for a higher amount threshold – at least PLN 500 in arrears. In both cases, the creditor must also inform the debtor by delivering the demand for payment by letter, in person or to an electronic delivery address, if one has been reported in the official database.

It is necessary to meet these conditions in order for a debt entry to legally enter a BIG register, where it will be visible to potential counterparties and financial institutions.

How does the procedure work and what must the demand for payment contain?

A demand for payment is a key element of the procedure for reporting a liability to a BIG. This document must clearly specify the amount of the debt, the legal basis (e.g. contract or invoice) and contain a clear warning that if the debtor fails to pay the amount due within the prescribed period, the debtor’s details will be forwarded to a BIG.

If the debtor does not settle the debt, or if the creditor considers that the debt does in fact exist – even despite the debtor’s partial objections – the debtor can have the debt registered. Importantly, the legislation requires the creditor’s application to register a debt to also include any objections of the debtor regarding the existence or amount of the debt. This arrangement is intended to ensure the accuracy of the data and to protect debtors from a one-sided presentation of the case, particularly where the debt is the subject of litigation.

Adherence to these rules is essential to ensure that the process of entering a debtor in the BIG register takes place in accordance with the applicable law and balances the interests of both parties.

Summary

Business information bureaus play a key role in business transactions, enabling creditors to assess the payment reliability of counterparties and providing consumers and businesses with access to information about their potential arrears.

The Act on the Disclosure of Business Information and the Exchange of Business Data precisely regulates the duties of creditors in terms of the proper transfer and updating of data. At the same time, it provides debtors with the possibility of control and defence against possible inaccuracies. Thanks to these regulations, the entire process, despite interference in the area of financial privacy, is subject to strict protective procedures, which promotes greater transparency and honesty in business relations.

The effect of BIGs is a safer economic environment in which market participants can make informed decisions, minimising the risk of cooperating with unreliable business partners.